Question

Select the most appropriate answers from the alternatives given below and rewrite the sentences.

Non-Cash items are not recorded in_____________ .
a) Income and Expenditure
b) Receipt and Payments Accounts
c) Balance Sheet
d) Profit and Loss Account

Answer 1

Non-Cash items are not recorded in Receipts and Payments Account.

Explanation: Receipts and Payments Account is a summary of cash and bank transactions over a certain period. It is prepared by societies, clubs, associations etc. It is prepared on cash basis. So, any transaction that is not recorded in the Cash Book will not be entered in the Receipts and Payments Account also.

On the other hand, Income and Expenditure Account, Balance Sheet and Profit and Loss Account record non- cash items such as depreciation. These items are not recorded in the Receipts and Payments Account.