Question

What do you mean by income and expenditure account? How will you convert the receipt and payment account into income and expenditure account?

Answer 1

Income and expenditure account is a record of showing the amounts of money coming into and going out of an organisation , during a particular period of time. In British Company it is called profit and loss account.
CONVERSION
1. leave the opening and closing balance of cash and bank given in receipt and payment account.
2. take only revenue items of income and expenditure and leave all those items which are capital nature.
3. make all adjustments for outstanding and prepaid expenses, accrued income ,income received in advance, provision for depreciation etc.
4. take all items only for current period ie. items relating to preceding and succeeding periods are to be ignored.
MARK AS BRAINLIEST plz

Answer 2

Income and Expenditure Account (I&E) is similar to the Profit and Loss Account in the sense that while the former is prepared to ascertain surplus or deficit during an accounting period, the latter is prepared to ascertain net profit or net loss incurred during an accounting period. I&E Account is a nominal account and is prepared on the accrual basis. It records all transactions of revenue nature that are related to the current accounting period (whether outstanding or prepaid) for which the books are maintained. All expenses and losses are recorded on the debit side (Expenditure side) and all income and gains are recorded on the credit side (Income side) of I&E Account. The closing balance or the balancing figure of I&E Account is termed as surplus (or deficit), if the sum total of the Income side exceeds (is lesser than) the sum total of the Expenditure side.