Outstanding expenses are _______ while preparing receipts and payments account

Receipts & Payments Account

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Income & Expenditure Account

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Balance sheet

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All of these

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Solution

The correct option is D
All of these

Receipts and payments account is prepared based on cash basis of accounting so outstanding expenses are not considered while preparing receipts and payments account.

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What do we do with prepaid expenses while preparing Receipts and Payments Account?

Q. Receipt and Payment account shows no ________ items such as depreciation, outstanding expenses, accrued income etc.

From the following Receipts and Payments Account of Jan Kalyan Club, prepare Income and Expenditure Account for the year ending 31st December, 2012.

$\begin{matrix} Receipts and Payment Account Dr & Suspense Account & Cr \end{matrix} \begin{matrix} Receipts & Amount & Payments & Amount (Rs) & (Rs) To Cash in hand on 1.1.2012 & 6, 800 & By Salary & 24, 000 To Subscriptins & 60, 200 & By Travelling Expenses & 6, 000 To Donation & 3, 000 & By Stationary & 2, 300 To Sale of Furniture (Book value & By Rent & 16, 000 Rs 6,000) & 4, 000 & By Repairs & 700 To Entrance fees & 800 & By Books purchased & 6, 000 To Life Membership fees & 7, 000 & By Building purchased & 30, 000 To Interest on Investments(@5 % & By Cash in hand on 31.12.12 & 1, 800 for full year & 5, 000 ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 86, 800 - ------ - - ------ - & ¯ ¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ¯ 86, 800 - ------ - - ------ - \end{matrix}$

Additional Information :

$\begin{matrix} Particulars & As on & As on 1.1.2012 & 31.12.2012 (i) & Subscriptions Received in Advance & 1, 000 & 3, 200 (i i) & Outstanding Subscriptions & 2, 000 & 3, 200 (i i i) & Stock of Sationery & 1, 200 & 800 (i v) & Books & 13, 500 & 16, 500 (v) & Furniture & 16, 000 & 8, 000 (v i) & Outstanding Rent & 1, 000 & 2, 000 \end{matrix}$

PRACTICAL PROBLEMS

(Outstanding Expenses and Prepaid Expenses)

From the following information supplied to you, prepare Income and Expenditure Account for the year ending on 31/03/2013 and Balance Sheet as on that date for Suryodaya Club, Nasik.

Balance Sheet as on 01/04/2012
Liabilities	Amount Rs	Assets	Amount Rs
Capital Fund	50,000	Land	60,000
Bank Overdraft	35,000	Outstanding Subscriptions	5,000
Outstanding Salary	2,000	Prepaid Insurance Premium	2,500
		Cash in Hand	9,500
		Furniture	10,000
	87,000		87,000

Receipts and Payments Account for the year ending 31.03.2013
Dr.					Cr.
Receipts	Amount Rs	Payments		Amount Rs
To Balance b/d	9,500	By Bank Overdraft (Repaid)		35,000
To Subscription	95,000	By Salary		12,500
To Admission Fees	7,500	By Insurance Premium		8,000
		By Interest		1,700
		By Miscellaneous Expenses		4,400
		By Furniture		20,000
		By Balance c/d
		Cash in Hand	5,400
		Cash at Bank	25,000	30,400
	1,12,000			1,12,000

Adjustments:

1) Subscriptions received, includes Rs 3,000 for 2011-2012 and Outstanding Subscriptions for 2012-2013 was Rs 8,000.

2) Salary Paid includes Rs 2,000 Paid for last year

3) On 31/03/2013, Prepaid Insurance Premium was Rs 3,000

4) Admissions Fees are to be capitalized.

5) Depreciate Furniture by Rs 2,000

On what basis the receipts and payments account is prepared?

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Outstanding expenses are _______ while preparing receipts and payments account

The correct option is D All of these Receipts and payments account is prepared based on cash basis of accounting so outstanding expenses are not considered while preparing receipts and payments account.

The correct option is D
All of these

Receipts and payments account is prepared based on cash basis of accounting so outstanding expenses are not considered while preparing receipts and payments account.