Question

Write three objectives of receipt and payment account

Answer 1

Receipt and payment account.

It refers to that account which records all the cash receipts and cash payment during the daily life of business .

✨_____________✨

Objectives of receipt and payment account.

(1) Records all cash transactions ÷ Receipt and payment account is very helpful in preparation of all cash receipts and payments during the daily life of the business . It records all the transactions on cash basis.

(2) Helpful for NPO ÷ NPO is the non profit organization which are setup only for the purpose of non earning profit . Receipt and payment helps these NGO s in getting it's financial position.

(3) Helps the NPO in preparation of Income and expenditure Account ...÷ Recept and payment main objective is to help the non profit organization in preparation of income and expenditure Account ...

✨______________✨

Answer 2

Explanation:

The Receipts and Payments Account is a summary of the Cash book without date column. It is an elementary form of account commonly adopted by not-for-profit making concerns such as Hospitals, Clubs etc.

Objectives:

• it should compute the opening balance of the Accumulated Fund, or Capital fund of the Institution with the help of opening Balance Sheet.
• Opening ledger accounts in respect of various items of income and expenditure in which accrual or outstanding at the beginning or at the end of the period have to be adjusted.
• Transferring balance of Income and Expenditure Account to the Accumulated Fund/Capital Fund Account.