Steps in the preparation of receipt and payment account
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There are 4 steps for the preparation of receipt and payment account :-
step 1 : Take opening balance of cash in hand and cash at bank from the cash book and enter on the debit side of receipt and payment accounts as it's first item.Credit balance, if any of the bank balance (i.e, bank overdraft ) shall be shown on the credit side of receipts and payment accounts as it's first item.
step 2 :Take item wise aggregate of various receipts and enter on the debit side irrespective of their nature (i.e, capital or revenue)and ignoring the period (past, current or future)to which these receipts pertain.
step 3 : Take item wise aggregate of various payments and enter on the credit side irrespective of their nature (i.e,capital or revenue) and ignoring the period (past , current or future) to which these payments pertain.
step 4:compute the difference between the total of debit side and total of credit side of the receipts and payments account and put the difference on the side which is short.
step 1 : Take opening balance of cash in hand and cash at bank from the cash book and enter on the debit side of receipt and payment accounts as it's first item.Credit balance, if any of the bank balance (i.e, bank overdraft ) shall be shown on the credit side of receipts and payment accounts as it's first item.
step 2 :Take item wise aggregate of various receipts and enter on the debit side irrespective of their nature (i.e, capital or revenue)and ignoring the period (past, current or future)to which these receipts pertain.
step 3 : Take item wise aggregate of various payments and enter on the credit side irrespective of their nature (i.e,capital or revenue) and ignoring the period (past , current or future) to which these payments pertain.
step 4:compute the difference between the total of debit side and total of credit side of the receipts and payments account and put the difference on the side which is short.
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