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Question
State any three points of difference between ‘Receipts and Payment Account’ and ‘Income and Expenditure Account’.
Solution
- The Receipts and Payments Account is a summary of cash receipts and payments, whereas the Income and Expenditure Account is similar to a trade company's Profit and Loss Account.
- The Account of Receipts and Payments is a real account, whereas the Account of Income and Expenditure is a nominal account.
- The Receipts and Payments Account solely has cash items, whereas the Income and Expenditure Account has both cash and non-monetary items.
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RELATED QUESTIONS
Income and expenditure contain only ______ items.
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