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Question
State whether the following statement is True or False with reasons.
There is no difference between Receipts and Payments Account and Income and Expenditure Account.
Options
True
False
Solution
There is no difference between Receipts and Payments Account and Income and Expenditure Account. - False.
Explanation:
In the receipts and Payments Account, all receipts and payments transactions in cash or through the bank are recorded irrespective of the current year, previous year or next year. In contrast, in the income-expenditure Account, only the current year’s incomes and expenses (revenue) are recorded.
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| Particulars | ₹ | ₹ | Particulars | ₹ |
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| Dr. | Receipts and payment Account for the year ended 31st March, 2020 |
Cr. | |
| Receipts | Amount ₹ | Payments | Amount ₹ |
| To Balance b/d | By Salaries to Teaching Staff |
10,00,000 | |
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| To Subscription | 30,000 | By Stationary | 24,000 |
| To Life Membership Fees | 40,000 | By Fixed Deposit | 7,00,000 |
| To Donation | 5,00,000 | By Balance c/d | |
| To Tuition fees | 11,50,000 | Cash in hand | 20,000 |
| To Term fees | 2,00,000 | Cash at bank | 2,25,000 |
| To Sundry Receipts | 10,000 | ||
| To Admission Fees (Revenue) | 50,000 | ||
| 21,38,000 | 21,38,000 | ||
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| Particulars | 01.04.2019 | 31.03.2020 |
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| Furniture | 3,19,000 | 3,00,000 |
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| Capital Fund | 10,37,000 | ? |
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| Dr. | Receipts and payment Account for the year ended 31st March, 2019 |
Cr. | |
| Receipts | Amount ₹ | Payments | Amount ₹ |
| To Balance b/d: | By Salaries to: | ||
| Cash | 12,000 | Teaching Staff | 15,00,000 |
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| By Balance c/d : | |||
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| 31,03,000 | 31,03,000 | ||
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All receipts are the items of revenue income.
Mumbai University prepares ______ Account instead of a Profit and Loss account.
