Question

Receipts and Payments Account is prepared on ____________.

• A. Accrual basis
• B. Cash basis
• C. Hybrid basis
• D. Any of the above

Answer 1

The correct option is B Cash basis

Receipt and payment account records all the cash transactions which take place during the business operations. These transactions can be revenue or capital in nature. Receipt and payment account is also called a summarized cash book. Hence, all the transactions are to be recorded on cash basis only.