What is the receipt and payments accounts?

What is the receipt and payments accounts?

Receipt and payment account functions as a summary of cash payments and receipts of an organisation during an accounting period.

It provides a picture of the cash position of a Not-for-Profit organisation.

It does not differentiate between the receipts and payments, whether they are of capital or revenue in nature and records all cash and bank transactions of both capital and revenue nature.

Receipt and payment account does not include any non-cash transactions such as depreciation.

The Receipt and payment account is prepared at the end of an accounting period on the cash basis system.

Sample of Receipt and Payments Accounts

Difference between Income and Expenditure account and Receipt and payments accounts.

Receipt and Payments accounts	Income and expenditure accounts
Receipt and payments accounts is the real account.	Income and expenditure accounts is nominal account, it is the profit and loss account of non-profit organization.
Receipt and payments accounts is prepared to know the balance of cash in hand and cash at bank.	Income and expenditure account is prepared to know the organization’s position for the current year either surplus or deficit from the net results of the activities undertaken.
Receipt and payment account records all the receipts on the debit side and all the payments on the credit side.	Income and expenditure account records all expenses and losses on the debit side and all income and gains on credit side.
Receipts and payments account records both capital and revenue nature items during the year.	Income and expenditure accounts records transactions of revenue nature relating to the accounting period/financial year.
Receipt and payments account opening balance shows cash in hand and cash at bank, and the balance in the end represents cash in hand and cash at bank closing balance.	Income and expenditure have no opening balance but the closing balance represents either deficit or surplus.
Receipts and payments account does not include non-cash items. i.e., Depreciation	Income expenditure accounts includes non-cash items, i.e., depreciation.
Receipts and payments accounts records receipts and payments made during the year whether relating to preceding, current or succeeding year.	Income and expenditure accounts records transactions of the current year only.

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Nadeem Khan
M. Com, MBA
mail id: ndmk1338@gmail.com