Question

State any three features of income and expenditure?

Answer 1

Answer:

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Answer 2

Answer:

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Features of Income and Expenditure Account

Below mentioned are the characteristic features of Income and Expenditure Account :

• Income and expenditure account presented by non-trading entities are much like the profit and loss a/c presented by trading entities.

• It is prepared by stringently following the fundamentals of the double-entry system of bookkeeping or accounting.

• It is always prepared during the end of the period which normally comprises of 1 year.

• It decides the surplus or deficit of income over expends of the non-trading entities for the particular 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. Any income and expenditure of capital nature are not comprehended.

• It is prepared by accountants chosen by the enterprise’s management and is audited by an independent auditor.

• It does not begin with the opening balance, and it follows back the incomes received and expenditures incurred by the non-trading entities during the financial year.

• The accumulated or accrual concept of accounting is rigidly pursued when it is prepared.

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