What are the feature of Receipt and Payment Account?
What are the feature of Receipt and Payment Account?
The features of Receipts and Payments Account are as follows
(i) Summary of cash book: It is simply a summary of the cash book. Receipts are recorded on the debit side while payments are entered on the credit side.
(ii) Records all the expenditure and gain: It records the total amounts of all receipts and payments irrespective of the period to which they pertain. It includes all receipts and payments whether they are of capital nature or of revenue nature.
(iii) Includes cash as well as bank transaction: No distinction is made in receipts/payments made in cash or through bank. With the exception of the opening and closing balances, the total amount of each receipt and payment is shown in this account.
(iv) Non-cash transactions are not recorded: Non-cash items such as depreciation, outstanding expenses and accrued income etc. are not shown in this account.
(v) Opening and closing balance: It begins with opening balance of cash in hand and cash at bank (or bank overdraft) and closes with the year end balance of cash in hand/ cash at bank or bank overdraft. In fact, the closing balance in this account (difference between the total amount of receipts and payments) which is usually a debit balance reflects cash in hand and cash at bank unless there is a bank overdraft.
The features of Receipts and Payments Account are as follows
(i) Summary of cash book: It is simply a summary of the cash book. Receipts are recorded on the debit side while payments are entered on the credit side.
(ii) Records all the expenditure and gain: It records the total amounts of all receipts and payments irrespective of the period to which they pertain. It includes all receipts and payments whether they are of capital nature or of revenue nature.
(iii) Includes cash as well as bank transaction: No distinction is made in receipts/payments made in cash or through bank. With the exception of the opening and closing balances, the total amount of each receipt and payment is shown in this account.
(iv) Non-cash transactions are not recorded: Non-cash items such as depreciation, outstanding expenses and accrued income etc. are not shown in this account.
(v) Opening and closing balance: It begins with opening balance of cash in hand and cash at bank (or bank overdraft) and closes with the year end balance of cash in hand/ cash at bank or bank overdraft. In fact, the closing balance in this account (difference between the total amount of receipts and payments) which is usually a debit balance reflects cash in hand and cash at bank unless there is a bank overdraft.
