Question

Receipts and Payments Account is prepared on -
(I) Accrual basis of accounting
(II) Cash basis of accounting
(III) Hybrid basis of accounting
The correct answer is -

• A. (I) only
• B. (I) or (II)
• C. Any of (I) or (II) or (III)
• D. (II) only

Answer 1

The correct option is D (II) only

Option D is correct. Receipts and payments Account is prepared on cash basis of accounting. It is a summarized cash book. All the cash receipts during the whole year is recorded on debit side. All the cash payments during the whole year is recorded on credit side. incomes or expenses that do not involve the inflow of cash are not recorded in this account.