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Question
It contains only revenue items.
Options
Receipts and Payments Account
Income and Expenditure Account
Balance Sheet
None of these
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Solution
Income and Expenditure Account
Explanation:
The Income and Expenditure Account contains only revenue items. It records all income and expenses related to the organization's operations for a specific period, excluding capital receipts and payments.
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RELATED QUESTIONS
Income and Expenditure Account is a ______ account.
Justify either for or against by giving a reason for the following statement. ‘Income and Expenditure account shows the opening and closing balances of cash in hand and cash at bank.’
Give any two uses of Income and Expenditure Account.
It is a summary of all incomes and expenses of the current accounting year. It is prepared to know the surplus or deficit during the accounting year.
This account is equivalent to the Profit and Loss Account of a business concern.
It serves as the basis for preparing the Balance Sheet of a non-trading organisation.
On the other hand, if the total of ______ side is greater than the total of ______ side, it is known as 'deficit' or 'excess of expenditure over income'.
Explain the term deficit in Income and Expenditure Account.
Why and by whom is an Income and Expenditure Account prepared?
Give five differences between Profit and Loss Account and Income and Expenditure Account.
