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Question
Its balance at the end shows the cash in hand and at bank (or overdraft) at the end of the 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 balance at the end of the year reflects the cash in hand and at the bank (or in overdraft). This account describes all cash transactions during the accounting period, including all receipts and payments. It provides a clear view of the organization's cash flow and liquidity position at the end of the year.
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RELATED QUESTIONS
The objective of preparing a ______ account is to find out the cash position of the organization.
Write any two features of the Receipt and Payment Account.
It is a summary of cash transactions. It is prepared to ascertain the cash balance at the end of the accounting year.
In receipt and payment account opening balance of cash in hand, cash at bank and all cash receipts are shown on the ______ side.
All cash payments are recorded on the ______ side of the receipt and payment accounts.
The primary objective of preparing this Account is to find out the cash position, opening and closing balances of cash in hand and at bank.
It alerts the management of a non-trading organisation about decline in cash receipts and increase in cash payments.
It contains both capital and revenue items.
Receipt and Payment account is a _____ account.
A receipts and payments account is a nominal account. Justify a reason either for or against.
