Commercial Applications
Answer
Real
Reason — Receipts and Payments Account is a real account. It records cash receipts and cash payments and follows the golden rule of real accounts — "debit what comes in and credit what goes out." Cash receipts come in, hence debited; cash payments go out, hence credited. (In contrast, Income and Expenditure Account is a nominal account.)
Related Questions
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
…………… shows the financial position of the organization.
- Trial balance
- Profit and Loss account
- Balance sheet
- Income and Expenditure account
Which of the following is not a feature of Balance Sheet?
- It is statement
- Reflects profit-loss of an organization
- It shows Capital Fund of the organization
- It shows financial position of the organization
…………… depicts the Capital fund of the organization.
- Profit and Loss Account
- Trading Account
- Balance Sheet
- Nominal Account