Question

Mention the difference between receipts and payment account and Income and Expenditure Account.

Answer 1

Receipts and payment A/c	Income & Expnediture A/c
1. It is a real account	1. It is a nominal account
2. It is summary of cash book	2. It is like a profit and loss A/c
3. Its debit side shows receipts and credit side shows payments	3. Debit side shows expenses and credit side shows income and gains
4. It starts with an opening balance of cash/bank	4. It does not start with cash/bank balance
5. It records both revenue and capital items	5. It records only revenue items.
6. Adjustments are not made	6. Adjustments are made
7. Objective is to ascertain the balance of cash in hand or cash at bank	7. Objective is for knowing surplus of deficit.
8. Its closing balance	8. Its balance is transferred to capital fund.
9. Includes receipts and payments for current year, previous year and next year.	9. Includes items relating to current year only.
10. It is prepared on cash system	10. It is prepared as mercantile system