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Question
The income and expenditure account is prepared on the basis of __________ system of accounting.
The income and expenditure account is prepared on the basis of __________ system of accounting.
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Solution
The correct option is A Basic
Income and Expenditure Account is prepared on an accrual basis. All incomes and expenses relating to the accounting year, whether they are actually received and paid or not, are taken into consideration. Expenditure is recorded on the debit side and income is recorded on the credit side.
Income and Expenditure Account is prepared on an accrual basis. All incomes and expenses relating to the accounting year, whether they are actually received and paid or not, are taken into consideration. Expenditure is recorded on the debit side and income is recorded on the credit side.
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