Difference Between Receipts and Payments Account and Income and Expenditure Account

Difference Between Receipts and Payments Account and Income and Expenditure Account:

Learning Objectives:

What is the difference between receipt and payment account and income and expenditure account?

Receipts & Payment Account

Income & Expenditure Account

It is a summary of the cash book

It takes the place of profit and loss account in non-trading concerns.

It begins with an opening balance and ends with a closing balance.

Does not commence with any balance

It records all sums received and paid whether they relate to revenue or capital items

It includes revenue items only

It include all sums actually received during the year whether they relate to the past, current or next year.

It includes the items relating to year for which it is prepared. Provision is made for all outstanding expenses and accrued income.

The receipts are shown on the debit side and the payments on the credit side.

Income is shown on the credit side and expenses on the debit side.

It simply ends with a closing balance of cash and does not show the result for the period.

It definitely shows whether there has been an excess of income over expenditures or vice versa.

It is not accompanied by a balance sheet.

It is always accompanied by a balance sheet.

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