A Receipts and payments account is simply a summary of the Cashbook. It shows on the debit side of all items of receipts during the period irrespective of Whether they are of a capital or revenue nature, and whether they relate to the period or not. Likewise, it shows on the credit side. All items of payments actually made during the period. Irrespective of their nature and period, the find balance of the account represents the closing balance of cash or bank or overdraft at the bank.
What is Income & Expenditure Accounts
Income and Expenditure Accounts are similar in form to the profit &Loss Account of a trading concern? It shows on the credit side all revenue incomes for the period to which it relates. Similarly, on the debit side, it shows all expenses of revenue nature for the period. No Capital expenditure or receipt is taken in the Income &; Expenditure Account.
If the credit total of this account exceeds the debit to led the balances is a surplus and is called Excess of Income over expenditure. Conversely, if the debit total exceeds the credit total, the balances is a deficit and is called. "Excess of Expenditure over Income.
Thus, the method and technique of the preparation of an Income and Expenditure Account are similar to that which is followed in The preparation of a profit &Loss Account of a profit-seeking concern.
