Tournament expenses with side come Dr or Cr
Answers
Answer:
Following are the characteristics of receipt and payment account:
It is a summary of the cash book.
We record all the cash receipts during the whole year on its debit side. Whereas, we write all the cash payments for the whole year on its credit side.
We include both receipts and payments in cash whether they are of capital and revenue nature.
We record only cash transactions in receipt and payment account.
It generally shows a debit balance. In the case of overdraft balance, its net balance may be credit.
Its closing balance shows closing cash in hand and closing cash at the bank.
Non-cash items such as depreciation, outstanding expenses, accrued incomes are also shown in this account.
Browse more Topics under Accounting For Not For Profit Organisations
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Balance Sheets
Method of Preparation
As we know, we prepare Receipts and payment account with all the cash receipts and cash payments for the whole year. We determine the net result of cash receipts and cash payments of a fixed time through this account.
The left-hand side of this account is known as “Receipts” and right-hand side of this account is known as “Payments”. All cash receipts are recorded on the left-hand side, while all cash payments are recorded on the right-hand side and are arranged in a classified form.
We start with taking opening balances of cash in hand and cash at bank and enter them on the debit side. (if there is bank overdraft at the beginning, we enter the same on credit side).
Now, we enter the total amounts of all receipts on the debit side and total amount of all payments on credit side (whether capital or revenue) and whether they are of past, current and future periods.
We do not include the incomes or expenses that do not involve the inflow or outflow of cash.
Now, we will find the difference between the total of the debit side and the total of the credit side of the account, the amount so found will be the closing balance of cash or bank.
In case, if the credit side is more than the debit side, the amount will be debited as bank overdraft and we will close the account.
Receipt and Payment Account
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Proforma of Receipt and Payment Account
Receipt and Payment Account
Receipts Amount (Rs.) Payments Amount (Rs.)
Balance b/d Balance b/d (overdraft)
Cash in hand Wages and Salaries
Cash at bank Rent
Subscriptions Rates and Taxes
General Donations Insurance
Sales of newspaper Printing and Stationery
Sale of Sports materials Advertisement
Interest on fixed deposits Sundry expenses
Interest in investments Telephone charges
Locker rent Entertainment expenses
Sales of scraps Audit Fees
Received from charity Honorarium
Miscellaneous receipts Repairs and Renewals
Sale of Investments Purchase of Assets
Sale of Fixed Assets Purchase of Investments
Life Membership Fees Balance c/d
Entrance fees Cash in hand
Balance c/d (overdraft) Cash at bank
xxx xxx
Solved Example for You
Question: From the following particulars related to Arman Point, prepare a Receipt and Payment account for the year ending 31st March 2018
Particulars Amount Particulars Amount
Opening cash balance 500 Sale of old sports materials 600
Opening bank balance 3600 Donation received 2300
Subscriptions collected for Rent paid 1500
2016-17 ₹ 250 Sports materials purchased 2400
2017-18 ₹ 3800 Purchase of refreshments 300
2018-19 ₹ 450 4500 Expenses for maintenance 1000
Sale of refreshments 500 Salary paid 1250
Entrance fees 500 Tournament expenses 1200
Furniture purchased 750
Office expenses 600
Closing cash in hand 200