What is Receipt and Payment Account?
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.
Receipt and Payment Account format
Receipt and Payment Account format is presented below:
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Features of Receipt and Payment Account
Below mentioned are some of the features of Receipt and Payment Account :
1.It does not include any transactions that are not cash or bank items.
2.It shows all cash payments and receipts without making any difference between capital and revenue
3. Receipt and Payment Account starts with the opening balance of cash and bank and ends with ending balance of cash and bank
4. It is prepared on the last day of the accounting period of the business organisation.
5. All cash and cheque receipts are recorded in the debit side while all cash and cheque payments are recorded on the credit side.
The above mentioned is the concept that is explained in detail about Receipt and Payment Account for the Class 12 Commerce students. To know more, stay tuned to BYJU’S.