Difference between Receipts and Payments Account and Income and Expenditure Account class 12

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receipts and payments account and income and expenditure account are important financial statement of NPO organisation.

1st chapter of class 12 accountancy subject in CBSE board is NPO. In this lecture we will discuss few difference between receipts and payments account and income and expenditure account restricted to the syllabus of class 12 CBSE Board.

Distinction between Receipts and Payments Account and Income and Expenditure Account class 12

Basis of DistinctionReceipts and Payments AccountIncome and Expenditure Account
1. NatureIt is just the summary of the cash book.It shows income over expenditure as surplus and expenditure over income as deficit during an accounting period.
2. Nature of ItemsIt records both receipts and payments of capital and revenue nature.It records only receipts and payments of revenue nature.
3. AdjustmentsAs it is prepared on the cash basis of accounting no adjustments are done of outstanding, prepaid accrued, and advance nature.It is prepared on the accrual basis of accounting all adjustments related to outstanding, prepaid, accrued and advance nature are made.
4. SidesDebit side records receipts and credit side records paymentsDebit side records revenue expenditure credit side records revenue income.
5. Types of AccountIt is a real accountIt is a nominal account.
6. Opening BalanceIt starts with a balance of cash and bankIt does not have any opening balance
7. Closing Balanceits closing balance shows the cash and bank balance at the end of the accounting year.Its closing balance is surplus if income exceeds expenditure and deficit if expenditure exceeds income.
8. Period of
Income & Expenses
It records all receipts and payments made during the year whether they relate to the current, previous, or next year.It records the incomes and expenditure of the current year only.
9. Balance SheetAs it records both revenue and capital nature transactions. Balance sheet is not necessarily prepared along with it.It records only transactions of revenue nature. So in order to show capital nature transactions, preparations of balance sheet is must.

Further Reading:-

Difference between Income and Expenditure Account and Profit & Loss A/c

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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.
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