Difference between Receipts & Payments Accounts and Income & Expenditure Account

 Expenditure Account 
The following are the main differences between a Receipts, Payment and Income & Expenditure Account.

1. A Receipts &Payments Account is nothing but a cash book of a non-trading concern showing the inflow and outflow of cash. Whereas an Income & Expenditure, Account is a revenue account of a non-trading concern similar to the P & L Account of a trading concern.


2. A Receipt & Payments Account may include expenses &in comeirrespective of whether they relate to the period or not But an Income &Expenditure Account includes only current year's Income & Expenses.


3. There is no need for changes like depreciation of assets, bad debt! provision etc, in a Receipt &Payments Account. But such changes are to be considered in an Income and Expenditure Account.


4. A Receipts & Payments Account does not differentiate between capital and Revenue items and therefore includes both.But an Income & Expenditure Account considers only revenue items.


5. In a Receipts &Payments Account, the items of incomes are shown on the debit side and the expenditure items are shown on the credit side as in the cashbook But in an Income &expenditure Account the expenses are shown on the debit side and incomes on the credit side as in a profit &loss account.


6. It is not followed by a Balance Sheet But an Income & Expenditure Account is usually followed by a Balance Sheet.


7. Receipts &Payments Account is merely a summary of the cash transaction ............, which begins with (the opening balances of cash and bank and ends with the closing balances of Cash & Bank. Whereas an Income &Expenditure Account does not start with an openingbalance but usually ends with a closing balance i.e. deficit &surplus.


8.The closing balance of a Receipts & Payments Account is to be carried toward in the same account of the succeeding Period. But the closing balance of an Income &Expenditure Account is usually transferred to the capital fund of the concern.

9. Outstanding Expenses and Accurate, Income is not considered. It only deals with the cash income and expenses during the period. But an Income &Expenditure Account considers outstanding Expenses as well as accrued Income for the period.