Question

What would the debit balance of the Receipts and Payments A/c indicate?

• A. The total cash payments during a period
• B. The loss incurred during a period
• C. Cash in hand or bank balance on the date of the balance
• D. Excess of income over expenditure

Answer 1

Answer: (C)

Cash in hand or bank balance on the date of the balance

A receipts and payments account is just like a cash account. It starts with opening balance and all the receipts and payments accounts are taken into account. Hence, after all the cash transactions are taken into account the balance that is left is the cash balance.