Question

State any one point of difference between Receipt and Payment account and Income and Expenditure Account. 

Distinguish between Receipts and Payments Account and Income and Expenditure Account. 

Answer 1

S. No.	Basis of Distinction	Receipts and Payments Account	Income and Expenditure Account
1.	Nature	It is a summary of cash receipts and cash payments.	It is like the Profit and Loss Account of a trading concern.
2.	Type of Account	It is a real account.	It is a nominal account.
3.	Object	It is prepared to know cash balance at the end of the year.	It is prepared to ascertain surplus at the end of the year.
4.	Nature of Items	It contains both capital and revenue items.	It contains only revenue items.
5.	Opening Balance	It starts with the opening balance of cash in hand and at bank.	It has no opening balance.
6.	Closing Balance	Its balance at the end shows the cash in hand and at bank (or overdraft) at the end of the year.	Its balance at the end shows the surplus or deficit for the year.
7.	Accrued/Outstanding Items	It contains only cash items and does not include accrued income, income received in advance, outstanding or prepaid expenses.	It is prepared on the accrual basis and therefore includes all accrued and outstanding items.
8.	Sides	Receipts are shown on debit side and payments on credit side.	Expenditure is shown on debit side and income on credit side.
9.	Period of Items	It includes receipts and payments relating to previous and next years.	It includes income and expenses relating only to current year.
10.	Non-Cash Items	It contains only cash items.	It contains non-cash items, e.g., depreciation, loss on sale of assets also.
11.	Balance Sheet	It need not be accompanied by a Balance Sheet.	It must be accompanied by a Balance Sheet