Question

How do you maintain a daily income and expenditure account?

Answer 1

Procedure to maintain income and expense account are given below:

• Include all transactions of revenue receipts and expenses.

• Capital incomes and expenses are not included in this account.

• Also, adjustments on prepaid expenses and outstanding expenses must be carefully recorded.

• Items included depreciation, profit or loss on sale of assets, and transaction in receipts and payment account must be included in this account.

• In the end, after recording all transactions of revenue and expenses, you’ll arrive at a balance. This resulting balance will reveal the surplus or deficit for the financial year.

Also see:

• Income and Expenditure Account
• Difference Between Capital Expenditure and Revenue Expenditure
• Classification of Expenditure

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