Income and expenditure account
Differences Between Receipts And Payments Account And Income And Expenditure AccountThe following are the main differences between receipts and payments account and income and expenditure account: 1. NatureReceipts and payments account is a summary of cash transactions for a period and it is a real account. Income and expenditure account is a summary of expenditure and income like trading and profit and loss account and it is a nominal account.2. ObjectiveReceipts and payments account is prepared to show cash and bank receipts and payments during the period to derive closing balance of cash and bank. Income and expenditure account is prepared to show the net result of the operation during the period to derive surplus or deficit.3. RecordingAll cash and cheque receipts are recorded on debit side of receipts and payments account where as all cash and bank payments are recorded on credit side. In income and expenditure account all expenditure of revenue nature are recorded on debit side and all incomes of revenue nature are recorded on credit side.4. Capital And Revenue ItemsThere is no distinction between capital and revenue receipts and payments in receipts and payments account. All expenses and incomes of revenue nature are recorded on accrual basis in income and expenditure account.5. ContentsReceipts and payments account contains only cash and bank transactions. Income and expenditure account contains both cash and non-cash expenses and incomes of revenue nature.6. Balance Sheet RequirementReceipts and payments account is not required to prepare balance sheet. Income and expenditure account is required to prepare balance sheet.7. AdjustmentsNo adjustments are required in receipts and payments account. In income and expenditure account adjustments are made because it is prepared on accrual basis.
Debit Balance- means outstanding balance, meaning you need to pay it! Credit Balance- means you have over paid.
Income and expenditure account is used by not for profit companies as they are formed for not for profit basis that's why they cannot use profit and loss account.
what is the different between error of transposition and casting
Credit is neither an income or an expenditure. It becomes an expenditure when you use it. expenditure
income over expenditure is profitexpenditure over income is loss
By preparing Receipts & Payments Account, Income and Expenditure Account and a Balance sheet.
In your Income and Expenditure Account, show the Health Insurance premium paid by you as expenses and claim income tax rebate as permissible in Income Tax Act of your country.
for a manufacturing concern it will be a manufacturing account and for a non manufacturing concern it will be a trading account or a profit and loss account or income and expenditure account.
Ignore the opening and closing cash and bank balances on the receipts and payments account. Eliminate all items of capital receipts and payments. Figure out the income of the year by deducting the total income received and adding the income accrued. Find the expenditure of the relevant period as well. When the account is balanced, it will show the surplus or deficit of the account.
Subscriptions o/s for 2008-09 rs.7000