Receipts and Payments account of NPO format, features, limitations

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Looking for Receipts and Payments account of NPO format, features and limitations.

See, Not-for-profit organizations prepare three types of accounts.

Receipts and payments accounts are one of them.

It is a kind of real account and is prepared as a cash book with a minor change in format.

Here in this lecture, we will discuss, what is receipts and payments account, its features, limitations, and format as given in the syllabus of class 12 CBSE Board.

What is receipts and payments accounts in NPO Chapter class 12

“In simple words, receipts and payments account is the summary of cash and bank receipts and payments during an accounting period.”

It is one of the accounts prepared by NPO organizations. It is prepared with the same concept as a cashbook by the business firm.

But there is a few format difference between both.

Format of Receipts and Payments Account in NPO Chapter

Here are a few points you should keep in mind while preparing it.

  1. It starts with opening cash and bank balance on the debit side.
  2. It ends with closing cash and bank balance at the credit side
  3. it records both cash and bank receipts and payments.
  4. Receipts are shown on the Debit side.
  5. Payments are shown on the Credit side

Here is the format

Features (Characteristics) of Receipts and Payments Account


The nature of this is an asset (real) account. it records cash and bank receipts and payments.


It is prepared on the cash basis of accounting.


It is prepared at the end of the accounting period and records cash and bank transactions whether it related to current, previous, and succeeding (next) accounting periods.


The main purpose is to show cash amounts received and paid under the different heads during the accounting year.

Nature of transactions recorded:-

It records all revenue and capital nature transactions.

Opening and Closing Balances:-

Its opening balances show cash in hand and cash at a bank in the beginning of the accounting period and closing balance shows cash in hand and at bank at the end of the accounting period.


No adjustments of outstanding, prepaid expenses and accrued, received in advance income is made in receipts and payments account as it is prepared on cash basis of accounting.

Limitations of Receipts and Payments Account

  1. As it is prepared on the Cash Basis of Accounting. It does no show actual expenses and income pertaining to given accounting period. besides showing revenue receipts and payments, it also shows capital receipts and payments in same account.
  2. It does not show whether organization is able to meet its day to day expenses out of its income or not.

Difference between Receipts and Payments Account and Cash Book

BasisReceipts and Payments AccountCash Book
BasisIt is prepared out of a cash book as a summary of it.It records each transactions of receipt and payment separately
PeriodIt is prepared at the end of the accounting periodIt is prepared on daily basis.
DateTransactions are not shown date wise rather in summarised form. Transactions of the same nature in one place.Transactions are recorded date-wise.
InstitutionsIt is prepared by Not for Profit OrganisationIt is prepared by all kind of organizations, be it business firm or NPO
SidesIts format contains receipts and payments side.It is divided into debit and credit sides
Ledger FolioThere is no column for ledger folioCash Book has a separate column for Ledger Folio

Receipts and Payments account is a Real Account

Yes, It is a real (Assets) account.

The receipts and Payments account is a Nominal Account.

No, it is not a nominal account. It is in fact a real (asset) account.

Which organization prepares receipts and Payment account.

Not-for-profit organization generally prepare receipts and payment account.

Further Reading:-

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
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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
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12.Accounting treatment of Subscription written off in NPO
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3.SK Sharma NPO Chapter solution 2021-22 Edition
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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.

Articles: 2015

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