Gujarat BoardEnglish MediumSTD 11 CommerceAccountP2 C9 Accounts ol‘Non—trading Concerns2 Marks
Question
Write Short notes: (1) Receipt Payment Account:
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Answer
Generally, non-trading concerns, mostly undertake their transactions in cash. Whateversummary is prepared by a non-trading concern, for their cash income and cashexpense during the year, is known as receipt payment account. This account is anabstract of cash transaction done during the year. The cash transaction with bankare also recorded. Its form is similar to the cash account. • Points to be considered during preparation of Receipt Payment Account:
$(i)$ Opening cash or bank balance is disclosed on the debit side of the receipt- payment account and if there is opening bank overdraft, it is disclosed on creditside.
$(ii)$ In this account on the debit side all the income received during the yearin cash or by cheque are recorded.
$(iv)$ In this account income received and amountpaid of any year are recorded.
$(v)$ In this account capital income and revenue income,capital expense and revenue expense are recorded.
$(vi)$ In this account non-cashtransactions like depreciation, bad debts, unpaid expenses, outstanding incomes,credit transaction are not recorded.
$(vii)$ At the end of the year closing balance isascertained.
$(a)$ If total of credit side is in excess, the amount of difference wouldappear on the debit side and is known as closing bank overdraft.
$(b)$ If total of debitside is in excess, the amount of difference would appear on the credit side and isknown as closing cash balance and bank balance.
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