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Question
State any three points of difference between ‘Receipts and Payment Account’ and ‘Income and Expenditure Account’.
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Solution
- The Receipts and Payments Account is a summary of cash receipts and payments, whereas the Income and Expenditure Account is similar to a trade company's Profit and Loss Account.
- The Account of Receipts and Payments is a real account, whereas the Account of Income and Expenditure is a nominal account.
- The Receipts and Payments Account solely has cash items, whereas the Income and Expenditure Account has both cash and non-monetary items.
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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.’
How is Receipts & Payments Account different from Income & Expenditure Account?
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.
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’.
All donations received by non-trading concerns are entered in the liabilities side of the balance sheet. Justify either for or against.
What is Income and Expenditure Account?
Mention any two features of the Income and Expenditure Account.
Distinguish between Receipt and Income.
