1
Question
Receipts and Payments Account is in nature of _______________.
Receipts and Payments Account is in nature of _______________.
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Solution
The correct option is C Real Account
Receipt and payments account is a real account just like cash account. Its prepared at the end of the year. All receipts are recorded on the debit side and expenses on the credit side. Its basically a summary of cash book, it records cash expenses and incomes of all nature and is prepared on cash basis. It follows the rule of a real account, debit what comes and credit what goes out. The receipts are credited and the payments are debited.
Receipt and payments account is a real account just like cash account. Its prepared at the end of the year. All receipts are recorded on the debit side and expenses on the credit side. Its basically a summary of cash book, it records cash expenses and incomes of all nature and is prepared on cash basis. It follows the rule of a real account, debit what comes and credit what goes out. The receipts are credited and the payments are debited.
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