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  • Receipt and Payment Account

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    Ajay Pratap
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    Receipt and payment account is a summary of all cash receipts and payments during an accounting year for a non-profit organization. It shows receipts on the left side and payments on the right side, classified under suitable headings. The opening balance is last year's closing cash and the closing balance is this year's closing cash. It helps verify the cash book and ascertain the cash in hand at the end of the year.

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    Receipt and payment account is a summary of all cash receipts and payments during an accounting year for a non-profit organization. It shows receipts on the left side and payments on the right side, classified under suitable headings. The opening balance is last year's closing cash and the closing balance is this year's closing cash. It helps verify the cash book and ascertain the cash in hand at the end of the year.

    Copyright:

    © All Rights Reserved
    Scarica in formato PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    450 visualizzazioni3 pagine

    Receipt and Payment Account

    Caricato da

    Ajay Pratap
    Receipt and payment account is a summary of all cash receipts and payments during an accounting year for a non-profit organization. It shows receipts on the left side and payments on the right side, classified under suitable headings. The opening balance is last year's closing cash and the closing balance is this year's closing cash. It helps verify the cash book and ascertain the cash in hand at the end of the year.

    Copyright:

    © All Rights Reserved
    Scarica in formato PDF, TXT o leggi online su Scribd
    Segnala contenuti inappropriati
    di 3

    ReceiptandPaymentAccount:

    DefinitionandExplanation:
    "Areceiptandpaymentaccountisasummarizedcashbook(cashandbank)foragivenperiod".
    or
    "Thisissimplyasummaryofthecashtransactionsasinthecashbook,analyzedandclassifiedunder
    suitableheadings,includingtheopeningandclosingbalances".
    Nonprofitorganizations(alsocallednontradingconcerns)prepareareceiptandpaymentaccountat
    theendofyear.Withthehelpofthisaccountandsomeadditionalinformation,anincomeand
    expenditureaccountispreparedtodisclosethetrueresultsofnonprofitorganizations.Receiptand
    paymentaccountcannotdisclosethetrueresultofnontradingconcern.
    Alltheinformationnecessaryforthepreparationofthisaccountisavailablefromcashbook.Various
    cashreceiptsandcashpaymentsduringthewholeyearfindplaceinthisaccountinaclassified
    manner.Itsclosingbalanceindicatescashinhandandcashatbankattheyearend.

    CharacteristicsofReceiptandPaymentAccount:
    Followingarethefeaturesofreceiptandpaymentaccount:

    1.Itisabridgedadditionofcashbookitis,ineffect,asummaryofcashbook.
    2.Allcashreceiptsduringthewholeyeararerecordedonitslefthand(i.e.,debit)side.Whileall
    thecashpaymentsduringthewholeyearwrittenonitsrighthand(i.e.,credit)side,arrangedin
    aclassifiedform.

    3.Cashreceiptsandcashpaymentsofbothcapitalandrevenuenaturearerecordedhere.
    4.Onlycashtransactionsarerecordedinthisaccount.
    5.Itgenerallyshowsadebitbalance.Incaseofbankoverdraftbalance,however,itsnetbalance
    maybecredit.Again,itmayalsoshownilbalancebutsuchoccasionisrare.

    6.Itsclosingbalanceindicatesclosingcashinhandandclosingcashatbank.
    7.Itisnotanaccountwithinthedoubleentrysystemitisastatementonly.
    8.Itispreparedonthelastdayoftheaccountingyear.

    Advantages:
    Thefollowingaretheadvantagesofreceiptandpaymentaccount:

    1.Totalreceiptsandtotalpaymentsundervariousheadsareavailableataglance.
    2.Theamountofcashinhandattheyearendcanbeascertained.
    3.Thecorrectnessofcashbookcanbeverifiedthroughit.Thetotalofdebitsideofcashbookwill
    agreewiththetotalofreceiptsideofthisaccount.Ontheotherhand,thetotalofcreditsideof
    cashbookwillagreewiththatofpaymentofthisaccount.
    MethodofPreparation:
    Receiptsandpaymentaccountispreparedwithallthecashreceiptsandcashpaymentsofthewhole
    year.Thenetresultofcashreceiptsandcashpaymentsofafixedtimeisdeterminedthroughthis
    account.Soitisitsheadingwillbe:
    ReceiptandPaymentAccount
    FortheYearEnded31.12.2005

    Itslefthandsideiscalled"Receipts"andrighthandside"payments".Onthelefthandsideallcash
    receiptsarerecorded,whileontherighthandsideallcashpaymentsarerecordedarrangedina
    classifiedform.Itstartswithlastyear'sclosingcashinhandandcashatbankandcloseswithcurrent
    year'sclosingcashinhandandcashatbank.Inotherwords,itsopeningbalanceindicateslastyear's
    closingcashinhandandcashatbank,whileitsclosingbalancemeanscurrentyear'sclosingcashin
    handandcashatbank.

    Example:
    Fromthefollowingcashbookpreparereceiptsandpaymentsaccountfortheyearended31December
    2005.
    CashBook
    Date

    L/R

    Amount

    Date

    L/R

    Amount

    2005

    Jan.1

    Balanceb/d

    250

    Jan.5

    Rent

    200

    Feb.2

    Subscription

    600

    Jan.16

    Travelingexpenses

    15

    Admissionfee

    25

    Fed.12

    Salaries

    250

    Apr.5

    Subscription

    950

    Mar.17

    Entertainmentexpenses

    50

    May20

    Saleofoldnewspapers

    June3

    Subscription

    10

    Apr.20

    Electriccharges

    20

    880

    May5

    Furniture

    300

    July15

    Admissionfee

    30

    May10

    Postage

    18

    Aug.20

    Saleofoldnewspaper

    15

    June3

    Stationary

    120

    Sep.5

    Donation

    100

    July12

    Electriccharges

    30

    Oct.1

    Saleofoldfurniture

    150

    Aug.3

    Newspaper

    25

    Nov.15

    Donation

    50

    Sep.15

    Salaries

    320

    Dec.28

    Subscription

    250

    Sep.20

    Newspaper

    65

    Oct.3

    Travelingexpenses

    25

    Oct.12

    Postage

    12

    Nov.5

    Rent

    300

    Nov.16

    Entertainmentexpenses

    80

    Dec.5

    Books

    450

    Dec.12

    Salaries

    350

    Dec.25

    Rent

    130

    Dec.31

    Balancec/d

    550

    2005

    Mar.10

    References

    3,310

    References

    3,310

    2006

    Jan.1

    550

    Solution:
    ABCClub
    ReceiptandPaymentAccount
    Fortheyearended31stDecember,2005
    Receipts
    Balanceb/d
    Subscription[600+950+880+250]
    Admissionfee[25+30]
    Saleofoldnewspaper[10+15]

    $
    250
    2,680

    Payments
    Rent[200+300+130]

    $
    630

    Travelingexpenses[15+25]

    40

    55

    Salaries[250+320+350]

    920

    25

    Entertainmentexpenses[50+80]

    130

    Donation[100+50]

    150

    Electriccharges[20+30]

    50

    Saleofoldfurniture

    150

    Furniture[200+300+130]

    300

    Postage[18+12]

    30

    Stationary

    120

    Newspaper[25+65]

    90

    Books

    450

    Balancec/d

    550

    3,310

    Balanceb/d

    3,310

    550

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