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Explain differences: Receipt – Payment Account and Income-Expenditure Account:

Vidyadip · Accepted Answer

Point Receipt - Payment Account Income-Expenditure Account 1. Meaning A summary of cash received and cash paid prepared by a non-trading concern is known as receipt-payment account. To know the result of a concern at the end of the year, the account which is prepared is known as income-expenditure account. 2. Nature It is similar to cash account. It is similar to profit & loss account 3. Balance Opening balance is cash balance and bank balance or bank overdraft. Closing balance is cash balance and bank balance or bank overdraft. No opening balance is prevails. Closing balance is either excess of income over expenditure or excess of expenditure over income. 4. Treatment of transactions Debit side receipts and credit side payments are recorded. On debit side revenue expenses and on credit side revenue incomes are recorded. 5. Income & Expenses In Receipt-Payment account, capital and revenue both cash receipt payment and expense is shown. In Income-expenditure account, only current year revenue income or expense is shown. 6. Time period In receipt-payment account, income and expenses are of which year is not considered. In income-expenditure account, only running year's revenue income and revenue expense is considered. 7. Non-cash transaction and accounting standard Receipt-payment A/c. is maintain on the basis of cash. So, no effect show on cash. Non-cash transaction like depreciation, bad debts, outstanding income, Expense not paid etc. is not noted. Income-expenditure A/c is maintain on the basis of Trading A/c., so in that none-cash transaction like depreciation, bad debts, outstanding income, not paid expense is noted. 8. Balance In this account there is a balance. This balance is only bank overdraft. In this account there is no debit or credit balance. 9. Difference In receipt-payment account both side difference show closing balance of a year. In income-expenditure A/c., difference during a year show 'Excess of income over expenditure or Excess of expenditure over income.' 10. Balance-Sheet In receipt-payment account there is not necessary to prepare Balance sheet. In income-expenditure account there is necessary to prepare Balance-sheet.

$1$	Mita returned goods of $Rs.1,000.$
$2$	Goods of $Rs.20,000$ sold to Kalpana at $10%$ trade discount and $5%$ cash discount.
$3$	Goods of $Rs.2,000$ destroyed by fire and insurance company admitted claim $Rs.1,000.$

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Point	Receipt - Payment Account	Income-Expenditure Account
$1.$ Meaning	A summary of cash received and cash paid prepared by a non-trading concern is known as receipt-payment account.	To know the result of a concern at the end of the year, the account which is prepared is known as income-expenditure account.
$2.$ Nature	It is similar to cash account.	It is similar to profit & loss account
$3.$ Balance	Opening balance is cash balance and bank balance or bank overdraft. Closing balance is cash balance and bank balance or bank overdraft.	No opening balance is prevails. Closing balance is either excess of income over expenditure or excess of expenditure over income.
$4.$ Treatment of transactions	Debit side receipts and credit side payments are recorded.	On debit side revenue expenses and on credit side revenue incomes are recorded.
$5.$ Income & Expenses	In Receipt-Payment account, capital and revenue both cash receipt payment and expense is shown.	In Income-expenditure account, only current year revenue income or expense is shown.
$6.$ Time period	In receipt-payment account, income and expenses are of which year is not considered.	In income-expenditure account, only running year's revenue income and revenue expense is considered.
$7.$ Non-cash transaction and accounting standard	Receipt-payment A/c. is maintain on the basis of cash. So, no effect show on cash. Non-cash transaction like depreciation, bad debts, outstanding income, Expense not paid etc. is not noted.	Income-expenditure A/c is maintain on the basis of Trading A/c., so in that none-cash transaction like depreciation, bad debts, outstanding income, not paid expense is noted.
$8.$ Balance	In this account there is a balance. This balance is only bank overdraft.	In this account there is no debit or credit balance.
$9.$ Difference	In receipt-payment account both side difference show closing balance of a year.	In income-expenditure A/c., difference during a year show 'Excess of income over expenditure or Excess of expenditure over income.'
$10.$ Balance-Sheet	In receipt-payment account there is not necessary to prepare Balance sheet.	In income-expenditure account there is necessary to prepare Balance-sheet.

P2 C9 Accounts ol‘Non—trading Concerns — Account STD 11 Commerce — Question

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