1. Pursue the receipts and payments account throughly.
2. Exclude the opening and closing balances of cash and bank as they are not an income.
3. Exclude capital receipts and capital payments as these are to be shown in the balance sheet.
4. Consider only the revenue receipts to be shown on the income side, and revenue expenditure to the expenditure side of the income and expenditure account.
5. Considering the following items not appearing in the receipts and payments account that need to be taken into account for determining the surplus deficit for current year:
• Depreciation of fixed assets:
• Provision for doubtful debts if required
• Profit or loss on sale of fixed assets.
