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Question
It is a summary of cash transactions. It is prepared to ascertain the cash balance at the end of the accounting year.
Options
Receipts and Payments Account
Income and Expenditure Account
Balance Sheet
None of these
Solution
Receipts and Payments Account
Explanation:
The Receipts and Payments Account is a summary of all cash transactions made by an organization over a specific period, usually an accounting year.
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RELATED QUESTIONS
The objective of preparing a ______ account is to find out the cash position of the organization.
State five uses of Receipts and Payments account.
It alerts the management of a non-trading organisation about decline in cash receipts and increase in cash payments.
Receipt and payment account has the following limitation(s).
Its balance at the end shows the cash in hand and at bank (or overdraft) at the end of the year.
It contains both capital and revenue items.
Receipt and Payment account is a _____ account.
Give two/three uses of Receipts and Payments Account.
Give one difference between Receipts and Payments Account and Cash Book.
A receipts and payments account is a nominal account. Justify a reason either for or against.
