Question

Write the defferent in receipts and payment account and income and expenditure accountWrite the defferent in receipts and payment account and income and expenditure account

Answer 1

• The difference between receipts and the payments represents the balance of cash in hand or at bank or bank overdraft at the closing date.

• The difference of Income and expenditure represents either surplus or deficit balance.

• Income and expenditure account is a summary of expenditure and income like trading and profit and loss account and it is a nominal account.

• Receipts and payments account is prepared to show cash and bank receipts and payments during the period to derive closing balance of cash and bank.

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