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Questions
Give two/three uses of Receipts and Payments Account.
Mention any two uses of Receipts and Payments Account.
Answer in Brief
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Solution
The main uses of Receipts and Payments Account are as follows:
- Receipts and Payments Account serves as the basis for preparing the Income and Expenditure Account and the Balance Sheet.
- It alerts the management of a non-trading organisation about decline in cash receipts and increase in cash payments.
- It informs the members about main sources of income and major items of payments of their organisation.
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