Difference between Income and Expenditure a/c and Profit & Loss a/c Class 12 CBSE Board

Share your love

Looking for the difference between income and expenditure account and Profit and Loss account in NPO chapter class 12 CBSE, ISC, and State Board.

The income and expenditure account is prepared by a Non-profit organization and the profit and loss account is prepared by the business firm.

However basis of preparation of both accounts is same. Both are prepared on the basis of accrual basis of accounting. Only income and expenses of revenue natures are recorded in it.

Difference between income and expenditure account and profit and loss account is only the presentation.

We have summarized few differences below.

Distinction between Income and Expenditure account and Profit & Loss Account class 12

Basis of DistinctionIncome and Expenditure AccountProfit & Loss Account
Objectivethe main objective is to ascertain excess of income over expenditure or vice versa during an accounting periodHere main objective to ascertain profit or loss during an accounting period.
Prepared byIt is generally prepared by a Non-profit organization.It is prepared by a business firm having a profit motive.
Basis of PreparationIt is prepared from the information extracted from receipts and payments account other information.It is prepared on the basis of trial balance and other information.
BalanceIts balance represents Surplus and Deficit.Its balance represents net profit or net loss.

Further Reading:-

S.NTopics
1.NPO Basic Concepts and Theory
2.Receipts and Payments account of NPO format, features, meaning
3.Income and expenditure account of NPO format features meaning
4.Difference between income and expenditure account and Profit & Loss A/c
5.Difference between Receipts and Payments account and income and expenditure account
6.Difference between receipts and payments account and cash book
7.Difference between NPO and profit organisation class 12
S.NTopics
1.What is Fund Based Accounting in NPO
2.Admission and Entrance fees Accounting Treatment
3.Accounting Treatment of Life Membership Fees in NPO
4.Accounting Treatment of Donation in NPO
5.Accounting Treatment of Legacy in NPO
6.Accounting Treatment of Government Grant in NPO
7.Accounting Treatment of sale of Old News paper in NPO
8.Accounting Treatment of sale of Old Sports Material in NPO
9.Accounting Treatment of Cost of Material Consumed in NPO
10.Accounting treatment of Sale of Assets in NPO
11.Accounting treatment of Subscription in NPO
12.Accounting treatment of Subscription written off in NPO
S.NNPO Chapter Solution
1.TS Grewal NPO Chapter solution 2021-22 Edition
2.DK Goyal NPO Chapter solution 2021-22 Edition
3.SK Sharma NPO Chapter solution 2021-22 Edition
Share your love
Default image
Anurag Pathak

Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.

Articles: 2015

Leave a Reply

Your email address will not be published.

close

Ad Blocker Detected!

Our Website is made possible by displaying online advertisements to our visitors. Please consider supporting us and remove the AD - Blocker to read this article.

Refresh