Question

Difference between receipt and payment account and income and expenditure account.

Answer 1

Receipt and payment accounts show only cash and bank transactions in that accounting period whereas the income and expenditure account are on accrual basis.  

The receipt and payment account must start with a cash opening balance brought forward from previous period while the income and expenditure account does not start with any balance.

Capital and revenue receipts and payments are included in the receipt and payment account while only the income and expenditures of revenue are included in the income and expenditure account.

The receipt and payment account includes receipts and payments relating to the period immediately before or after whereas the income and expenditure account must include only income and expense items belonging to the period under review.

Receipts are shown on the debit side and payments on the credit side in the receipt and payment account while as in the income and expenditure account,   all revenue appears on the credit side and expenditures on the debit side if it is prepared in accounts form.

For more details about the receipt and payment account and income and expenditure account refer here;

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