Question

Income and expenditure account records transaction of ____________.

Answer 1

Income and Expenditure (I & E) account is the equivalent of P & L account (Profit and Loss Account). In an income and expenditure account, surplus and deficit is determined during the accounting period while in a P& L account the net profit or loss is determined at the running of accounting period. It is nominal account and records transactions that are of revenue nature. The closing balance is called deficit or surplus based. Therefore, the correct answer is option (a) i.e revenue nature only