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Question
What are the features of Receipt and Payment Account?
Solution
The following are the features of Receipt and Payment Account:
1. Nature: It is a Real Account. It is a summarised version of Cash Book.
2. Nature of Transactions: It records only cash and bank transactions. Transactions other than cash and bank like depreciation, loss/ profit on sale of assets, etc. are not recorded in this account.
3. No distinction between Capital and Revenue items: It records all cash and bank receipts and payments of both capital and revenue nature.
4. Opening and closing balance: It begins with the opening balance of cash and bank and ends with the closing balance of the cash and bank (balancing figure) at the end of the accounting period.
5. Purpose: It reveals the cash position of an organisation. It helps to ascertain the total amount paid and received during an accounting period.
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RELATED QUESTIONS
State whether the following statement is True or False.
All receipts are the items of revenue income.
Distinguish between and 'Income and Expenditure Account' and 'Receipts and Payments Account' on the following basis:
- Nature
- Depreciation
From the following particulars taken from the Cash Book of a health club, prepare a Receipts and Payments Account.
| Particulars | Rs |
| Opening balance: | |
| Cash in Hand | 5000 |
| Cash at Bank | 25000 |
| Subscriptions | 165000 |
| Donations | 35000 |
| Investment Purchased | 80000 |
| Rent Paid | 20000 |
| General Expenses | 21500 |
| Postage and stationery | 2000 |
| Courier charges | 1000 |
| Sundry Expenses | 2500 |
| Closing Cash in Hand | 12000 |
Write a word / term / phrase which can substitute of the following statement.
The fees paid by a person who wants to become a life member of the concern, for his whole life.
