what is receipt and payments accounts:
(1) receipts and payment account:– receipts and payments account is a summary of the cash book and it shown the opening cash and bank , balance the receipt and payments in cash or by cheque during an accounting period and the resultant balance of cash and bank at the end of the accounting period . all receipts (whether in cash or by cheque) are shown on the left-hand side, and all payments (whether in cash or cheque) are shown on the right-hand side:
features of receipt and payments account:
- it is the summary of the cash and bank transactions, like cash book , all the receipts(capital or revenue) are debited and all the payments (capital or revenue )are credited
- it start with opening cash and bank balance (through sometimes they are merged)and also ends with their closing balance,
- it includes all cash and bank receipts and payments , whether they are related to current, past or future periods,
- it does not record non-cash items(e, g , depreciation)
- this account is usually not a part of the double entry system, it is the duplicate of cash book in concise form,
format of receipts and payments account:
| receipts | Amount | payments | Amount |
| To balance b/d Cash Bank To subscription : – for the previous year for the current year for the next year To entrance fees: To donation for building To general donation To life membership fees To legacy To grant from the government To rent To receipts on annual sports To sale of old sports materials To sale of old magazines To sundry receipts To balance c/d * (bank overdraft ) *** | **** **** **** **** **** **** **** **** **** **** | By balance b/d (bank overdraft) * By annual sports expenses By salaries and wages By rent, rates and taxes By insurance By furniture By sports equipments By books and periodicals By Audit fees By printing and stationery By honorarium By bank charges By postage and telegram By water and electricity By conveyance and travelling By sundry expenses By annual dinner expenses By investments By balance c/d :** Cash** Bank** | **** **** **** **** **** **** **** **** **** **** |
Income & expenditure account:
an income & expenditure account is equivalent to the profit and loss account of business firm.. it is prepared by matching the revenues against the expense for a specific period , usually a year. since not-for -profit organisation do not earn profit (or incur loss) , they do not prepare profit and loss account but for evaluating the financial conditions of the organisation , they prepare income and expenditure account at the end of the year,, this account shows excess of income over expenditure :
features of income and expenditures account;
- it is a nominal account prepared at the end of the financial year for finding out the surplus or deficit of the period
- it is prepared by matching expenses against the revenues of the period
- all capital expenditures and incomes are excluded..
- only current year, s incomes and expenses are considered
- it also records non-cash items such as bad debts , depreciation etc,
- all current year, s revenue expenses and losses are recorded on its debit side and all income (revenue) and gains on its credit side
- the balance of this account represents either the excess of income over expenditure (if the total of the credit side is more than that of the debit side) or excess of expenditure over income (if the total of the debit side of this account is more than that of its credit side)
format of income and expenditure account:
for the year ending
| Expenditure | Amount | Income | Amount |
| To salaries and wages Add: out, at the end Less: prepaid at the end Add: prepaid in the beginning Less: out, in the beginning To rent rates and taxes To insurance premium To depreciation on furniture and sports equipments To books and periodicals To Audit fees To printing & stationery To honorarium To bank charges To postage and telegram To electricity and water To conveyance and travelling To surplus i. e excess of income over expenditure | **** **** **** **** **** **** —— **** **** **** **** **** | By subscription received Add: out, at the end Less: advance at the end Add: advance in the beginning Less: out in the beginning To entrance fees (only that portion which is to be treated as revenue) By general donation By life membership fees (only that portion which is to be treated as revenue) B y profit on annual sports (receipts—expenses) By profit on sale of provisions Sale+ closing stock—purchase –opening stock ) By rent of club hall By dividend By deficit** | **** **** **** **** **** **** —— **** **** **** **** **** |