Question

What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?​

Answer 1

Here's your answer

Answer:

1. Leave the opening and closing balance of cash and bank given in the receipts and payments account.
2. Take only revenue items of income and expenditure and leave all those items which are of capital nature.
3. Make all adjustments for outstanding and prepaid expenses, accrued income, income received in advance, provision for depreciation or bad debts etc.
4. Taking items only for the current period i.e., items relating to the preceding and succeeding periods are to be ignored.

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