Commercial Applications
It contains both capital and revenue items.
- Receipts and Payments Account
- Income and Expenditure Account
- Balance Sheet
- None of these
Answer
Receipts and Payments Account
Reason — Receipts and Payments Account contains both capital and revenue items. All cash receipts (whether of revenue or capital nature, e.g., subscriptions and sale of fixed assets) are shown on the debit side, and all cash payments (whether of revenue or capital nature, e.g., salaries and purchase of furniture) are shown on the credit side. In contrast, Income and Expenditure Account contains only revenue items.
Related Questions
The capital fund in the Balance Sheet increases with a surplus shown in the Income and Expenditure Account.
- True
- False
Regarding the components of an Income and Expenditure Account, which statement(s) is (are) accurate?
Statement 1: Income and Expenditure Account is prepared to ascertain the profit or loss of a non-profit organization.
Statement 2: Income and Expenditure Account includes both revenue and capital items.
Statement 3: Income and Expenditure Account is only applicable to businesses and corporations.
Statement 4: Income and Expenditure Account records only cash transactions.
- 1 & 2
- 3 & 4
- Only 1
- 2 & 4
Which of the following is/are correct statement(s)?
Statement 1: Income and Expenditure Account includes both capital and revenue items.
Statement 2: Receipts and Payments Account is a summary of cash transactions over a specific period.
- Only Statement 1 is correct
- Only Statement 2 is correct
- Both Statements 1 and 2 are correct
- Both Statements 1 and 2 are incorrect
If the total of …………… side is greater than the total of …………… side, it is called 'surplus' or 'excess of income over expenditure'.
- Debit, credit
- Credit, debit
- Credit, credit
- Debit, debit