Question

Mention any two important characteristics of Income and Expenditure Account ?
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Answer 1

Answer:

It is always prepared during the end of the period which normally comprises of 1 year. ... The surplus or deficit from the income and expenditure account is moved to the capital fund a/c. The Income and expenditure account of only revenue nature are incorporated in this account.

Answer 2

It is generally prepared by non trading concerns on an accrual basis.

• The account is a comprehensive list of all revenue and expenditure products related to the current year of taxation
• The characteristics of the account are -

1. Not-for-profit concerns generally prepare the Income and Expenditure Account to determine the surplus / deficit resulting from an organization's activities.
2. The account is maintained on an accrual basis, which means that recording is done when transactions take place.