Question

four differences between income and
Expenditure
Account and
and profit and loss account
​

Answer 1

Answer:

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Answer 2

Answer:

Income & Expenditure Account:

1. It is a nominal account, prepared for the purpose of calculating surplus (excess of income over expenditure) or deficit (excess of expenditure over income) of non-profit organizations.

2. The major source of income is subscriptions, donations and grants.

3. The surplus or deficit is not distributed among the members of non-profit organizations; rather it is added to the capital fund.

4. Final accounts are prepared from Receipts and Payments Account and additional information

Profit & Loss Account:

1. It is nominal account, prepared for the purpose of calculating net profit or net loss of business enterprises.

2. The major source of income is the revenue received from sale of goods or rendering services by the business enterprise.

3. The net profit or net loss is distributed among the owners of business enterprises.

4. Final accounts are prepared from Trial Balance and additional information.

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