What is recipets and payment account
Answers!
Hare Krishna
You must be in 12th std.
See
the Reciepts and Payments A/c is made basically for Professional entities
You had seen organizations like Clubs, Dharmshalas etc. ? They don't work for trading! They are Not for Profit organizations.
Get it!
Now,
What shall they make to know their state of Finance??
They make a ledger where they record - What did we recieve? (Fees, Donation, Grant from Govt. etc.)
and
What/Whom did we pay? (Taxes, electricity, rent etc.)
So, now if the Reciepts column shows more balance than the Payments one; then we have Gain/Surplus etc.(given in your book)
and if the Payments column shows more balance than Reciepts one; then we'd be having Loss/Deficit (given in book).
Receipt and Payment Account:
Definition and Explanation:
"A receipt and payment account is a summarized cash book (cash and bank) for a given period".
or
"This is simply a summary of the cash transactions as in the cash book, analyzed and classified under suitable headings, including the opening and closing balances".
Non-profit organizations (also called non-trading concerns) prepare a receipt and payment account at the end of year. With the help of this account and some additional information, an income and expenditure account is prepared to disclose the true results of non-profit organizations. Receipt and payment account cannot disclose the true result of non-trading concern.
All the information necessary for the preparation of this account is available from cash book. Various cash receipts and cash payments during the whole year find place in this account in a classified manner. Its closing balance indicates cash in hand and cash at bank at the year end.
Characteristics of Receipt and Payment Account:
Following are the features of receipt and payment account:
It is abridged addition 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 (i.e., debit) side. While all the cash payments during the whole year written on its right hand (i.e., credit) 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 in this account.
It generally shows a debit balance. _______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 a statement only.
Method of Preparation:
Receipts and payment account is prepared with all the cash receipts and cash payments of the whole year.
So it is its heading will be:
Receipt and Payment Account
For the Year Ended 31.12.2005
Its left hand side is called "Receipts" and right hand side "payments". On the left hand side all cash receipts are recorded,
while on the right hand side all cash payments are recorded arranged in a classified form.
It starts with last year's closing Cash in hand & bank and closes with current year's Closing cash.
In other words, its Opening balance indicates last year's closing Cash,
while its Closing balance means Current year's closing Cash.
Hope You're clear enough :)
Comment
What is recipets and payment account
Answer the question...
Hare Krishna
You must be in 12th std.
See
the Reciepts and Payments A/c is made basically for Professional entities
You had seen organizations like Clubs, Dharmshalas etc. ? They don't work for trading! They are Not for Profit organizations.
Get it!
Now,
What shall they make to know their state of Finance??
They make a ledger where they record - What did we recieve? (Fees, Donation, Grant from Govt. etc.)
and
What/Whom did we pay? (Taxes, electricity, rent etc.)
So, now if the Reciepts column shows more balance than the Payments one; then we have Gain/Surplus etc.(given in your book)
and if the Payments column shows more balance than Reciepts one; then we'd be having Loss/Deficit (given in book).
You must be in 12th std.
See
the Reciepts and Payments A/c is made basically for Professional entities
You had seen organizations like Clubs, Dharmshalas etc. ? They don't work for trading! They are Not for Profit organizations.
Get it!
Now,
What shall they make to know their state of Finance??
They make a ledger where they record - What did we recieve? (Fees, Donation, Grant from Govt. etc.)
and
What/Whom did we pay? (Taxes, electricity, rent etc.)
So, now if the Reciepts column shows more balance than the Payments one; then we have Gain/Surplus etc.(given in your book)
and if the Payments column shows more balance than Reciepts one; then we'd be having Loss/Deficit (given in book).
Receipt and Payment Account:
Definition and Explanation:
"A receipt and payment account is a summarized cash book (cash and bank) for a given period".
or
"This is simply a summary of the cash transactions as in the cash book, analyzed and classified under suitable headings, including the opening and closing balances".
Non-profit organizations (also called non-trading concerns) prepare a receipt and payment account at the end of year. With the help of this account and some additional information, an income and expenditure account is prepared to disclose the true results of non-profit organizations. Receipt and payment account cannot disclose the true result of non-trading concern.
All the information necessary for the preparation of this account is available from cash book. Various cash receipts and cash payments during the whole year find place in this account in a classified manner. Its closing balance indicates cash in hand and cash at bank at the year end.
Characteristics of Receipt and Payment Account:
Following are the features of receipt and payment account:
It is abridged addition 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 (i.e., debit) side. While all the cash payments during the whole year written on its right hand (i.e., credit) 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 in this account.
It generally shows a debit balance. _______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 a statement only.
Method of Preparation:
Receipts and payment account is prepared with all the cash receipts and cash payments of the whole year.
So it is its heading will be:
Receipt and Payment Account
For the Year Ended 31.12.2005
Its left hand side is called "Receipts" and right hand side "payments". On the left hand side all cash receipts are recorded,
while on the right hand side all cash payments are recorded arranged in a classified form.
It starts with last year's closing Cash in hand & bank and closes with current year's Closing cash.
In other words, its Opening balance indicates last year's closing Cash,
while its Closing balance means Current year's closing Cash.
Hope You're clear enough :)
Comment
What is recipets and payment account