Question

State the essential features of receipts and payment accounting

Answer 1

.Receipts and Payments Account is a summary of the Cash Book. All the cash receipts are recorded on the Receipts side (i.e.Debit side) and all the cash payments are recorded on the Payments side (i.e. Credit side) of Receipts and Payments Account. It isprepared on the basis of cash and bank transactions recorded in the Cash Book. It begins with the opening balance of cash andbank and ends with the closing balances of cash and bank (balancing figure) at the end of the accounting period. It records all thecash and bank transactions both of capital and revenue nature. It not only records the cash and bank transactions relating to thecurrent accounting period but also cash and bank receipts (or payments) received during the current accounting period that maybe related to the previous or next accounting period.The following are the features of Receipt and Payment Account.

1.
Nature
: It is a Real Account. It is a summarised version of the Cash Book.

2.
Nature of Transactions
: It records only cash and bank transactions. Transactions other than cash and bank like depreciation,loss/ profit on sale of assets, etc. are not recorded in this account.

Answer 2

The following are the features of Receipt and Payment Account:

1. Nature: It is a Real Account. It is a summarised version of Cash Book.

2. Nature of Transactions: It records only cash and bank transactions. Transactions other than cash and bank like depreciation, loss/ profit on sale of assets, etc. are not recorded in this account.

3. No distinction between Capital and Revenueitems: It records all cash and bank receipts and payments of both capital and revenue nature.

4.Opening and closing balance: It begins with the opening balance of cash and bank and ends with the closing balance of the cash (balancing figure) at the end of the accounting period.

5. Purpose: It reveals the cash position of an organisation. It helps to ascertain the total amount paid and received during an accounting period.