Question

What is Receipts and Payments Account ? Explain the difference between receipts and payments account and income and expenditure account.​

Answer 1

Explanation:

Receipts and payments accounts are created using a simple form of accounting that summarises all monies received and paid via the bank and in cash by the charity during its financial year, along with a statement of balances.

Receipts and payments account contains only cash and bank transactions. Income and expenditure account contains both cash and non-cash expenses and incomes of revenue nature. Receipts and payments account is not required to prepare balance sheet. Income and expenditure account is required to prepare balance sheet.