where will you disclose the following in the financial accounts of non profit organisation Legacy and loss on sale
Answers
Receipts and Payments Account
The receipts and payments account is merely a Summary of Cash and Bank-transactions for a year. All that appears in the Cash Book also appears in this account. It starts with the opening Cash or Bank Balance and ends with the balance of cash or bank at the end of the year. All receipts of Cash or Cheque are recorded on the debit side and all the payments on the credit side. Receipts and Payments of both Capital and Revenue nature are recorded. The receipts and payments relating to previous or future year will also be recorded, if the transactions take place during the year. The balance in the account represents cash in hand or bank at the end of the financial year. Usually receipts of cash are more than payments. If however, the credit side exceeds the debit side, it represents the net bank overdraft.
The Receipts and Payment Account does not give any indication whether current (revenue) expenses are being met out of current (revenue) incomes. There can be a sustantial cash balance, and yet the current (revenue) incomes are not sufficient to meet out the current (revenue 0 expenses. Large cash balance may result, for instance, from sale of a building; but that is not an income and is merely conversion of one asset, the building into another asset viz. cash.
The account which compares current incomes with current expenses is known as Income and Expenditure