Features:
The following are the features of Receipts and Payment Account.
It is an abridged edition of Cash Book-it is, in effect, a summary of Cash Book.
All cash receipts during the whole year are recorded on its left-hand side, while all cash payments during the whole year are written on its right-hand side, arranged in a classified form.Cash receipts and cash payments of both capital and revenue nature are recorded here.Only cash transactions are recorded here.
It will generally show debit balance. In case of bank overdraft balance, however, its net balance may be credit. Again, it may also show nil balance-but such occasion is rare.
Its closing balance indicates closing cash in hand and closing cash at bank.
It is not an account within the Double Entry System-it is statement only.
It is prepared on the last day of the accounting year.
Advantages:
The receipts and total payments under various heads are available at a glance.
The amount of cash in hand at the year-end can be ascertained.
The correctness of Cash Book can be verified through it.
The total of Debit side of Cash Book will agree with that of Receipts side of Receipts and Payments Account. On the other hand, the total of Credit side of Cash Book will agree with that of payments side of Receipts and Payments Account.
The following are the features of Receipts and Payment Account.
It is an abridged edition of Cash Book-it is, in effect, a summary of Cash Book.
All cash receipts during the whole year are recorded on its left-hand side, while all cash payments during the whole year are written on its right-hand side, arranged in a classified form.Cash receipts and cash payments of both capital and revenue nature are recorded here.Only cash transactions are recorded here.
It will generally show debit balance. In case of bank overdraft balance, however, its net balance may be credit. Again, it may also show nil balance-but such occasion is rare.
Its closing balance indicates closing cash in hand and closing cash at bank.
It is not an account within the Double Entry System-it is statement only.
It is prepared on the last day of the accounting year.
Advantages:
The receipts and total payments under various heads are available at a glance.
The amount of cash in hand at the year-end can be ascertained.
The correctness of Cash Book can be verified through it.
The total of Debit side of Cash Book will agree with that of Receipts side of Receipts and Payments Account. On the other hand, the total of Credit side of Cash Book will agree with that of payments side of Receipts and Payments Account.