Receipt and Payment Account
Receipt and Payment Account:
Learning Objectives:
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Define and explain receipt and payment account.
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Why a receipt and payment account is prepared?
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Prepare a receipt and payment account.
Definition and Explanation:
Receipt and payment account is a mere summary of cash book for a year. It begins with the cash in hand at the commencement and ends with that at the close of the year. Similarly to cash account, in receipts and payments account receipts are shown on the debit side while payments are shown on the credit side, without any distinction between capital and revenue. Moreover, it does not include an unpaid expenditure not any unrealized income relating to the period under review and so fails to reveal the financial position on the concern.
Format of Receipt and Payment Account:
Receipts | $ | Payments | $ |
Example:
Receipt and Payment Account
Receipts | $ | Payments | $ |
To Balance b/d To Annual subscription To Life membership fees To Entrance fees To interest on securities To sundry receipts |
1,240 |
By general expenses By salaries and wages By furniture By rent, rates & taxes By printing & stationary By Repairs By Balance c/d |
550 |
3,590 |
3,590 |
You may also be interested in other articles form “accounting from non-trading concerns” chapter:
- Final Accounts of Non-Trading Concerns
- Receipt and Payment Account
- Income and expenditure account
- Difference Between Receipts and Payments and Income and Expenditures Account
Other Related Accounting Articles:
- Difference Between Receipts and Payments Account and Income and Expenditure Account
- Final Accounts of Non-Trading Concerns
- Income and Expenditure Account
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what are the real differences between receipts and payments ?
RECEIPT AND PAYMENT ACCOUNT IS A SUMMARY OF CASH BOOK FOR AN ACCOUNTING YEAR. IT BEGINS WITH CASH IN HAND OR CASH AT BANK. IN THIS ACCOUNT , ALL CASH RECEIPT WRITTEN ON THE LEFT SIDE (debit side). WHILE , ALL CASH PAYMENT ARE SHOWN ON THE RIGHT SIDE (credit side). IT IS SHOWN CAPITAL RECEIPT AND REVENUE RECEIPTS . IT IS PREPARED ON CASH BASIS.THUS, RECEIPT AND PAYMENT ACCOUNT IS REAL ACCOUNT AND ASSETS ACCOUNT.