Receipts and Payments account of NPO class 12 format, features, limitations


Not-for-profit organizations prepare three types of accounts. receipts and payments account is one of them. It is a kind of real account and almost prepare 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 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 account prepared by NPO organizations. It is prepared with same concept as cash book by business firm.

But there is a few format difference among both.

Format of Receipts and Payments Account in NPO Chapter

Here are 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 asset (real) account. it records cash and bank receipts and payments.


It is prepared on cash basis of accounting.


It is prepared at the end of 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 amount received and paid under different head during the accounting year.

Nature of transactions recorded:-

It records all revenue and capital nature transactions.

Opening and Closing Balances:-

Its opening balances shows cash in hand and cash at 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.

Receipts and Payments account is a Nominal Account.

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

Which organization prepare receipts and Payment account.

Not for profit organization generally prepare receipts and payment account.


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