Receipts And Payments, Income and Expenditure Account

Receipts and payments account:

This is a statement of cash actually received and paid during a given period , Receipts being debited and payments credited .The receipts and payments account is a summary of the cash book

FEATURES OF RECEIPTS AND PAYMENTS ACCOUNT

1.It is a real account

2. Balance represent cash in hand

3. Only actual receipts and payments are recorded

4 Include capital and revenue items

                                              INCOME AND EXPENDITURE ACCOUNT

This is the account which shows the summary of revenue and running cost of a non- profit making organization.It follows the same principles as the profit and loss account of a trading concern. It is part of the double entry and income is shown on the credit side and expenditure on the debit side .

The balance represents surplus of income over expenditure and vice versa

FEATURES OF INCOME AND EXPENDITURE ACCOUNT

1. Equivalent of profit and loss in a trading concern

2. Balance represents surplus or deficiency

3. Expenditure are debited and income credited i.e it is a nominal account.

4. Adjustment for accruals and prepayments are made

5. capital receipts and expenditure are not posted but only revenue items

LAYOUT OF INCOME AND EXPENDITURE ACCOUNT

SIMILARITIES BETWEEN RECEIPTS AND PAYMENTS AND INCOME AND EXPENDITURE

1. Both accounts follow the principles of double entry

2. They are summaries of financial statements

3. Both are prepared by non-profit making concern

4. They are prepared to cover the same period

DIFFERENCES BETWEEN RECEIPTS AND PAYMENTS AND INCOME AND EXPENDITURE