Question

Consider the following statements

Statement 1 - "Receipt and Payment Account records the receipts and payments of revenue nature only".

Statement 2 - "Receipt and Payment Account records the receipts and payments of revenue nature and capital nature".

Options

• Only statement 1 is correct.

• Only statement 2 is correct.

• Both the statement is correct.

• None of the above

Answer 1

Only statement 2 is correct.

Explanation:

The Receipt and Payment Account summarizes various receipts and payments, regardless of whether they are for the current, prior, or subsequent period, or whether they are capital or income in nature.