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Question
Why and by whom is an Income and Expenditure Account prepared?
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Solution
- Non-trading organizations, such as non-profits, clubs, and societies, create an Income and Expenditure Account to record their financial success over a given time period.
- By summarizing their income and expenses, these organizations can determine whether they have a surplus or deficit, providing details about their financial health and overall efficiency.
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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.’
______ account is prepared to ascertain surplus or deficit at the end of an accounting year.
How is Receipts & Payments Account different from Income & Expenditure Account?
The closing balance of this Account shows surplus or deficit for the year.
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’.
Explain the term surplus in Income and Expenditure Account.
Explain the term deficit in Income and Expenditure Account.
State any one point of difference between Receipt and Payment account and Income and Expenditure Account.
All donations received by non-trading concerns are entered in the liabilities side of the balance sheet. Justify either for or against.
