State the meaning of Income and Expenditure Account.
State the meaning of Income and Expenditure Account.
Income and Expenditure Account (I&E) is somewhat like Profit and Loss Account. In other words Profit and Loss Account is prepared as Income and Expenditure Account in case of NPO. The only difference is that profit and loss account is prepared to ascertain the net profit or net loss incurred during an accounting period and income and expenditure account is prepared to ascertan the surplus or deficit during an accounting period.
Income and Expenditure account also follows the same rules and regulation as it is follows in case of Profit and Loss account which means all the adjustment will be made on accrual basis. Just like Profit and Loss Account It also records all transactions of revenue nature that are related to the current accounting year considering the adjustment for outstanding or prepaid as the case may be.
The debit side of income and expenditure records all the expenses and called expenditure side and credit side of income and Expenditure account records all the income and gains and called the income side. Excess of income over expenditure is termed as surplus and excess of expenditure over expenditure is called deficit. The format for Income and Expenditure Account is as follows.
Income and Expenditure Account (I&E) is somewhat like Profit and Loss Account. In other words Profit and Loss Account is prepared as Income and Expenditure Account in case of NPO. The only difference is that profit and loss account is prepared to ascertain the net profit or net loss incurred during an accounting period and income and expenditure account is prepared to ascertan the surplus or deficit during an accounting period.
Income and Expenditure account also follows the same rules and regulation as it is follows in case of Profit and Loss account which means all the adjustment will be made on accrual basis. Just like Profit and Loss Account It also records all transactions of revenue nature that are related to the current accounting year considering the adjustment for outstanding or prepaid as the case may be.
The debit side of income and expenditure records all the expenses and called expenditure side and credit side of income and Expenditure account records all the income and gains and called the income side. Excess of income over expenditure is termed as surplus and excess of expenditure over expenditure is called deficit. The format for Income and Expenditure Account is as follows.
