How to show fd balance in receipts and payments a/c?
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Preparation of R easily understand the process of preparing Receipts and Payments Account from Income and Expenditure Account and the necessary information. On the debit side of the Income and Expenditure Account, expenses for the year are given.
By making adjustments for outstanding expense and expense paid in advance in the beginning of the year and at the end of the year to the amount of an expense appearing in the Income and Expenditure Account, the cash payment against that particular head can be ascertained; this amount is shown on the credit side of Receipts and payments Account.
ADVERTISEMENTS:
Non-cash expenses like depreciation on fixed assets have to be ignored. Then payments in respect of capital expenditure like purchase of fixed assets and investments are also to be shown on the payments-side of the Receipts and Payments Account. To ascertain such amounts, calculations may have to be made. For example, suppose in the Income and Expenditure Account, Depreciation on Furniture and Loss on Disposal of Furniture appear at Rs 11,000 and Rs 1,000 respectively.
It is also gathered that the loss has arisen due to sale of furniture of the book value of Rs 8,000 for Rs 7,000. Further suppose that furniture in the beginning and at the end of the accounting year stood at Rs 98,000 and Rs 99,000 respectively.
Payment during the year for purchase of furniture can be ascertained as follows:

In the abovementioned case, in addition to showing cash payment of Rs 20,000 for purchase of furniture on the credit side of Receipts and Payments Account, cash receipt of Rs 7,000 on sale of furniture will be shown on the debit side of Receipts and Payments Account.
ADVERTISEMENTS:
Similarly, items of income appearing on the credit side of Income and Expenditure Account are taken up one by one to ascertain receipts of cash against each head of income. The amount of income as given in the Income and Expenditure Account will have to be adjusted for income accrued and due and also for income received in advance both in the beginning and at the end of the accounting year to ascertain the amount received against that particular head of income. Suppose, in the Income and Expenditure Account, income on account of Subscriptions appears at Rs 1, 91,000 and the information is also furnished.

On the debit side of the Receipts and Payments Account, subscriptions will be shown at Rs 1, 87,000. Capital receipts like cash received on sale of fixed assets and investments and increases in Capital Fund on account of items like Donations and Legacies, which do not figure in Income and Expenditure Account, will also be shown on the debit side of the Receipts and Payments Account.
Being summary of Cash Book, Receipts and Payments Account naturally starts with balances of cash in hand and cash at bank or bank overdraft in the beginning of the accounting year and ends with balances of cash in hand and cash at bank or bank overdraft at the end of the accounting year. Sometimes, a difference in the Receipts and Payments Account is the amount of one of these balances.
By making adjustments for outstanding expense and expense paid in advance in the beginning of the year and at the end of the year to the amount of an expense appearing in the Income and Expenditure Account, the cash payment against that particular head can be ascertained; this amount is shown on the credit side of Receipts and payments Account.
ADVERTISEMENTS:
Non-cash expenses like depreciation on fixed assets have to be ignored. Then payments in respect of capital expenditure like purchase of fixed assets and investments are also to be shown on the payments-side of the Receipts and Payments Account. To ascertain such amounts, calculations may have to be made. For example, suppose in the Income and Expenditure Account, Depreciation on Furniture and Loss on Disposal of Furniture appear at Rs 11,000 and Rs 1,000 respectively.
It is also gathered that the loss has arisen due to sale of furniture of the book value of Rs 8,000 for Rs 7,000. Further suppose that furniture in the beginning and at the end of the accounting year stood at Rs 98,000 and Rs 99,000 respectively.
Payment during the year for purchase of furniture can be ascertained as follows:

In the abovementioned case, in addition to showing cash payment of Rs 20,000 for purchase of furniture on the credit side of Receipts and Payments Account, cash receipt of Rs 7,000 on sale of furniture will be shown on the debit side of Receipts and Payments Account.
ADVERTISEMENTS:
Similarly, items of income appearing on the credit side of Income and Expenditure Account are taken up one by one to ascertain receipts of cash against each head of income. The amount of income as given in the Income and Expenditure Account will have to be adjusted for income accrued and due and also for income received in advance both in the beginning and at the end of the accounting year to ascertain the amount received against that particular head of income. Suppose, in the Income and Expenditure Account, income on account of Subscriptions appears at Rs 1, 91,000 and the information is also furnished.

On the debit side of the Receipts and Payments Account, subscriptions will be shown at Rs 1, 87,000. Capital receipts like cash received on sale of fixed assets and investments and increases in Capital Fund on account of items like Donations and Legacies, which do not figure in Income and Expenditure Account, will also be shown on the debit side of the Receipts and Payments Account.
Being summary of Cash Book, Receipts and Payments Account naturally starts with balances of cash in hand and cash at bank or bank overdraft in the beginning of the accounting year and ends with balances of cash in hand and cash at bank or bank overdraft at the end of the accounting year. Sometimes, a difference in the Receipts and Payments Account is the amount of one of these balances.
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