Commercial Applications
The closing balance of this Account shows surplus or deficit for the year.
- Receipts and Payments Account
- Income and Expenditure Account
- Balance Sheet
- None of these
Accounting
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Answer
Income and Expenditure Account
Reason — The closing balance of the Income and Expenditure Account shows surplus or deficit for the year. If the credit side (income) exceeds the debit side (expenditure), there is a surplus (excess of income over expenditure). If the debit side exceeds the credit side, there is a deficit (excess of expenditure over income). The surplus is added to the Capital Fund, while the deficit is deducted from it in the Balance Sheet.
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Related Questions
All cash payments are recorded on the …………… side of the receipt and payment accounts.
- Credit
- Debit
- Both (A) and (B)
- None of these
The primary objective of preparing this Account is to find out the cash position, opening and closing balances of cash in hand and at bank.
- Receipts and Payments Account
- Income and Expenditure Account
- Balance Sheet
- None of these
It alerts the management of a non-trading organisation about decline in cash receipts and increase in cash payments.
- Receipts and Payments Account
- Income and Expenditure Account
- Balance Sheet
- None of these
Receipt and payment account has the following limitation(s).
- It does not reveal surplus or deficit for the year
- It does not indicate financial position of the organisation
- It does not disclose details of receipts and payment
- All of these