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Question
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.
Options
Receipts and Payments Account
Income and Expenditure Account
Balance Sheet
None of these
Solution
Receipts and Payments Account
Explanation:
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) and to show the receipts and payments under different heads for the 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.
All cash payments are recorded on the ______ side of the receipt and payment accounts.
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.
Give two/three uses of Receipts and Payments Account.
A receipts and payments account is a nominal account. Justify a reason either for or against.
What is Receipts and Payments Account?
