Question

What is the nature of Income and Expenditure account?

Answer 1

Answer:

Income and Expenditure Account is a nominal account. Therefore, the rule of nominal account (debit all expenses and losses and credit all incomes and gains) is followed while preparing it. While preparing the account, only items of revenue nature are recorded and all items of capital nature are ignored.

Explanation:

I hope it will help you

mark me as a brainliest

Answer 2

Answer:

It is like a Profit and Loss Account of a profit-seeking entity. It is a nominal account.

Explanation:

The non-trading businesses create the income and expenditure account to assess whether there is an excess or a deficit of income over expenditures for a specific period of time. When creating the income and expense accounts of non-trading companies, the cumulative or accrual concept of accounting is strictly adhered to. It is prepared as a component of non-trading entities' final accounts and is equivalent to the profit and loss accounts presented by for-profit corporations.

A nominal account is the Income and Expenditure Account. As a result, when preparing it, the nominal account rule—debit all costs and losses and credit all profits and gains—is adhered to. Only revenue-related things are documented when producing the account, and all capital-related items are disregarded. For instance, the money received from the sale of an asset will not be recorded in it, but the profit or loss incurred on the sale of an asset will be.

#SPJ3