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Question
It serves as the basis for preparing the Balance Sheet of a non-trading organisation.
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 serves as the basis for preparing a non-trading organization's balance sheet. The surplus or deficit derived from the Income and Expenditure Account is added to or subtracted in the Balance Sheet.
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RELATED QUESTIONS
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.’
______ depicts the capital fund of the organization.
The closing balance of this Account shows surplus or deficit for the year.
This account is equivalent to the Profit and Loss Account of a business concern.
It contains only revenue items.
If the total of ______ side is greater than the total of ______ side, it is called ‘surplus’ or ‘excess of income over expenditure’.
Why and by whom is an Income and Expenditure Account prepared?
Mention any two features of the Income and Expenditure Account.
Give five differences between Profit and Loss Account and Income and Expenditure Account.
Distinguish between Receipt and Income.
