Question

The Receipts and Payments Account includes both cash and non-cash transactions such as depreciation.

Options

• True

• False

Answer 1

False

Explanation:

The Receipts and Payments Account summarises actual cash and bank transactions; therefore, it only captures cash inflows and outflows. Non-cash expenses, such as depreciation, do not require any physical movement of money; hence, they are removed from this account and documented in the Income and Expenditure Account.