State whether the following statements are True or False.

In the Income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.

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Solution

False

Explanation: Only income related to the current year is recorded in the Income and Expenditure Account, irrespective of whether the income is received in cash or not. In other words, income earned during a year is accounted within that year itself. So, income received in advance will be shown on the Liabilities side of the Balance Sheet and is also deducted from the total amount received during the year. On the other hand, income earned but not received (i.e. outstanding income) is shown on the Asset side of the Balance Sheet and is also shown on the credit side of Income and Expenditure Account.

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State whether the following statements are True or False. In the Income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.

State whether the following statements are True or False.

In the Income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.