Receipt and Payment Account:
Learning Objectives:
-
Define and explain receipt and payment account.
-
Why a receipt and payment account is prepared?
-
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
1,630 250 240 180 50 |
By general expenses By salaries and wages By furniture By rent, rates & taxes By printing & stationary By Repairs By Balance c/d |
550
550 800 500 125 150 915 |
|
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
