Difference between “Receipts and Payment Account” and “Income and Expenditure Account”.

Receipts and Payments Account: 

  1. Nature of Account: It is a real account.
  2. Basic Structure: It is basically a summarized cash book.
  3. Base: It is based on cash system.
  4. Opening Balance: Opening Balance rep-resents cash or bank balance in the beginning of the accounting period.
  5. Closing Balance: Closing Balance represents cash or bank balance at the end of the accounting period.
  6. Items of Debit side: It is debited with all the sums received.
  7. Items of Credit side: It is credited with all the sums paid out.
  8. Non-cash items: Non-cash items are not recorded in this account.
  9. Nature of items recorded revenue/capital: It records the receipts and payments whether of capital or revenue nature.
  10. Period to which items relate: It records transactions of current year, previous year and subsequent years provided flow of cash is affected.
  11. Treating of closing balance: Its Closing Balance is carried forward in the same account of the next period.

Income and Expenditure Account:

  1. Nature of Account: It is a nominal account.
  2. Basic Structure: It is like a Profit & Loss A/c.
  3. Base: It is based on accrual system.
  4. Opening Balance: It has no Opening Balance.
  5. Closing Balance: Its Closing Balance rep-resents either net surplus or net deficit.
  6. Items of Debit side: It is debited with the expenses and losses.
  7. Items of Credit side: It is credited with the income.
  8. Non-cash items: Non-cash items like depreciation and bad debts are shown.
  9. Nature of items recorded revenue/capital: It records the incomes, expenditures and losses of revenue nature.
  10. Period to which items relate: It records transactions pertaining to current year only.
  11. Treating of closing balance: Its Closing Balance is transferred to the Capital Fund in the Balance Sheet.

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