Question

Debit balance of receipts and Payments account indicate:

• A. The loss incurred during the period.
• B. The excess of incomes over expenditure of the period.
• C. The total cash payments during the period.
• D. Cash in hand or bank balance on the date of the balance.

Answer 1

Answer: (D)

Cash in hand or bank balance on the date of the balance.

A receipts and payment account is just like a cash account hence it begins with opening balance and ends with closing balance of cash. Hence the debit balance of receipts and payments account just like cash account reflects closing balance of cash at the end of the year after taking into account all the payments and receipts.