Question

Difference between receipt and payment and income and expenditure account

Answer 1

receipt n payment shows transactions through cash or bank. on contrary income n expenditure shows all income n expenses accrued or incurred during the particular financial year whether payment made or income recieved or not.

Answer 2

Answer!!

Difference between Receipts & Payments Account and Income & Expenditure Account:-

→ The aim of the receipts and payments a/c is to show the difference between the two sides showing cash and bank balances at the end. The aim of the income and expenditure a/c is to show the net result of activities undertaken during the year resulting in surplus or deficit.

→ The debit of receipts and payments shows receipts and credit shows payments. The debit of income and expenditure shows expenditure and credit shows income.

→ Receipts and Payments A/c is based on the cash system of accounting, hence, adjustments aren't made. The Income and Expenditure Account is based on the accrual system of accounting. Hence, some adjustments are made.

→ Balance, in the beginning, is the opening cash in hand and bank balance and balance, in the end, is the closing cash in hand and bank balance in the Receipts and Payments Account. There is no balance in the beginning in Income and Expenditure account. Balance at the end is either surplus or deficit.