Question

State the difference between receipts and payment account and income and
expenditure account?
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Answer 1

Answer:

Receipt and payment account: The difference between receipts and the payments represents the balance of cash in hand or at bank or bank overdraft at the closing date. Income and expenditure account: The difference of Income and expenditure represents either surplus or deficit balance.

Income and Expenditure Account is prepared on an accrual basis. ... Expenditure is recorded on the debit side and income is recorded on the credit side. A distinction is made between capital and revenue items and only revenue items are included in this account. Income and Expenditure Account is a nominal account.

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