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Receipts
and Payments Account |
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Income
and Expenditure Account |
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1 |
It is a
summarized statement of all cash
transactions during an accounting year. |
1 |
It is the
account of revenue income and revenue
expenditure of an accounting year. |
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2 |
Only cash transactions are recorded here. |
2 |
It is
not confined to, cash transactions only,
i.e. non-cash transactions are also included
in it. |
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3 |
The portion of
income or expenditure which has been
received or paid in cash this year, is
recorded here |
3 |
The
whole amount of income or
expenditure—whether received or paid in cash
or not—is recorded in it. |
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4 |
Transactions
involving cash receipts are recorded on
Debit side and those involving cash payments
are recorded on Credit side. |
4 |
All
expenditures are recorded on Debit side and
all incomes on Credit side. |
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5 |
Transactions—both capital and revenue-are
recorded here. |
5 |
Only revenue
transactions are recorded here. |
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6 |
Its
balance can never be credit. |
6 |
Its balance
may be either debit or credit. |
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7 |
Its
balance is carried over to Receipts &
Payments Account of the next year. |
7 |
Its balance is
transferred to Capital Fund. |
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8 |
This account
shows opening balance except in the first
year. |
8 |
It has no
opening balance. |
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9 |
The closing
balance of this account represent in the
first year. |
9 |
Its. closing
balance represents either surplus or
deficit. Credit balance indicates surplus,
while debit balance indicates deficit. |
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10 |
This account
records transactions relating to past,
present and future, years. Hence, no
adjustment is made for pre-received or
accrued incomes and pre-paid or outstanding
expenses. In a word, it is prepared on cash
basis. |
10 |
Transactions
relating to the current year only are
recorded in it. Hence, adjustments are
invariably made for pre-received or accrued
incomes and pre-paid or outstanding
expenses. In a word, it is prepared on
Accrual basis. |
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11 |
It is, in
fact, an abridged Cash Book. |
11 |
It is, infect,
similar to Profit & Loss ' Account of a
profit-seeking business
concern. |
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12 |
It is outside
the Double Entry system. |
12 |
It is within
the Double Entry system. |
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13 |
It is
not accompanied by Balance Sheet. |
13 |
It is
accompanied by Balance Sheet |
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14 |
Its
preparation is not compulsory. |
14 |
It is
compulsory. It must be prepared in order to
ascertain the true result of a concern. |
