Difference Between Receipts And Payments And Income And Expenditure Account
The main difference between receipt and payment account and income and expenditure account can be pointed out as follows:
1. Meaning
Receipt And Payment Account: Recording of cash and bank receipts and payments of the firm during the period.
Income And Expenditure Account: Recording of all cash and non-cash income and expenditure made by the firm during the period.
2. Account Type
Receipt And Payment Account: Real Account
Income And Expenditure Account: Nominal Account
3. Accrual Basis
Receipt And Payment Account: It does not follow the principle of accrual basis
Income And Expenditure Account: It strictly follows the principle of accrual basis
4. Purpose
Receipt And Payment Account: To show the closing balance (cash in hand or cash at bank).
Income And Expenditure Account: To show surplus or deficit.
5. Transaction Type
Receipt And Payment Account: Only cash and bank transactions are recorded
Income And Expenditure Account: Both cash transactions and non-cash transactions (which are of revenue nature) are recorded.
6. Requirement Of Balance Sheet
Receipt And Payment Account: Not required
Income And Expenditure Account: Required
7. Opening Balance
Receipt And Payment Account: Yes, it starts with opening balance.
Income and Expenditure Account: No, it has no opening balance
8. Similarity
Receipt And Payment Account: It is similar to cash book
Income And Expenditure Account: It is similar to profit and loss account
9. Double Entry System
Receipt And Payment Account: It ignores double entry system
Income And Expenditure Account: It follows double entry system
10. Compulsory
Receipt And Payment Account: It is not compulsory
Income And Expenditure Account: It is compulsory to prepare
11. Part Of Final Account
Receipt And Payment Account: No
Income And Expenditure Account: Yes
12. Based On
Receipt And Payment Account: Cash System
Income And Expenditure Account: Accrual System
13. Debit And Credit Items
Receipt And Payment Account: All cash and bank receipts are debited and payments are credited.
Income And Expenditure Account: Expenses and losses are debited and income is credited.
Also Read
14. Adjustment Required
Receipt And Payment Account: Not required
Income And Expenditure Account: Required
Receipt And Payment Vs Income And Expenditure Account (Comparison Chart)
I hope this post is helpful to understand the difference between receipts and payments and income and expenditure account and to make comparison between them.
Receipt And Payment Vs Income And Expenditure Account (Comparison Chart)
Basis For Difference
|
Receipts And Payment
Account
|
Income And Expenditure
Account
|
Introduction
|
Account that records all cash and bank receipts and payments
|
Account that records cash and non cash income and expenditure
|
Type
|
Real Account
|
Nominal Account
|
Accrual Basis
|
No
|
Yes
|
Purpose/Objective
|
To know closing balance
|
To know surplus/deficit
|
Type Of Transaction
|
Only cash transactions
|
Both cash and non cash
|
Balance Sheet Required?
|
No
|
Yes
|
Opening Balance
|
Yes
|
No
|
Similar To
|
Cash Book
|
Profit and loss account
|
Double Entry System
|
It ignores
|
It follows
|
Compulsory
|
No
|
Yes
|
Part Of Final Account ?
|
No
|
Yes
|
Based On
|
Accrual Basis
|
|
Debit Items
|
Cash and bank receipts
|
Expenses or losses
|
Credit Items
|
Payments
|
Income
|
Adjustment Required
|
No
|
Yes
|
I hope this post is helpful to understand the difference between receipts and payments and income and expenditure account and to make comparison between them.