Receipt and payments account is similar to single column cash book of trading concern.
Receipt and payment is a real account because cash is real account.
It also records bank transaction like cash.
Most of non-profit concerns prepare a cash book at the end of the year.
It contains all cash receipts and cash payments transactions.
All receipts are recorded in debit side and all payments are recorded in credit side.
It records only cash transactions relate to the present, past or future period.
These cash may be capitalized or revenue nature.
Keep in Mind (KIM)
Some organizations think receipt and payment account is not an account. |
Because, it is not based on double entry system of book keeping. |
This account is just a summary of a cash book. |
No adjustments are required for accrued or deferred transactions. |
The main features of receipt and payment accounts are given below:
Receipts and payments account is a real account.
It is prepared on cash basis.
This account is opened with the opening cash balance of the current year.
All cash or cheques received are recorded on the debit side.
All payments by cash or cheques are recorded on the credit side.
Both capital and revenue cash is recorded in this account.
All receipts and payment related to previous year, current year or future years are recorded.
Preparation of receipt and payment account does not involve any adjustments.
Receipt and payment is closed with the cash balance (bank balance also) available at the end.
The main limitations of receipt and payment accounts are given below:
Receipt and payment does not disclose the income or expenditure of the current year.
This account is not prepared on accrual basis.
Balance sheet cannot be prepared from this account only.
Receipt and payment account is only summary of cash book.
Depreciation and outstanding expenses are not recorded in this account.
This account does not show financial position of the concern.
Basis |
Receipt and payment account |
Cash book |
Nature |
It is not a general ledger, so there is not ledger folio number. |
It is general ledger, so there is ledger folio number. |
Preparation |
It is prepared by non-trading concern only. |
It is prepared by non-trading as well as trading concern. |
Date |
It is prepared at the end of accounting period for closing cash balance. |
It is prepared daily for cash transactions and cash in hand. |
Types |
It has only one type. |
It has four types; single column, double column, triple column and petty cash book. |
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Accounting Equation |
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Basic Journal Entries in Nepali |
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Basic Journal Entries |
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Journal Entry and Ledger |
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Ledger |
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Subsidiary Book |
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Cash Book |
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Trial Balance & Adjusted Trial Balance |
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Bank Reconciliation Statement (BRS) |
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Depreciation |
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Final Accounts: Class 11 |
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Adjustment in Final Accounts |
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Capital and Revenue |
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Single Entry System |
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Non-Trading Concern |
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Government Accounting |
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Goswara Voucher (Journal Voucher) |
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XYZ Club
As on 31st ………
Receipts |
Amount |
Payments |
Amount |
||
To Opening balance: |
|
By Salary and wages |
xxxx |
||
Cash |
xxxx |
|
By Rent paid |
xxxx |
|
Bank |
xxxx |
|
By Electricity and water |
xxxx |
|
To Subscription |
xxxx |
By Telephone and mobile |
xxxx |
||
To Donation |
xxxx |
By Internet and cable expenses |
xxxx |
||
To Grants |
xxxx |
By Printing and stationery |
xxxx |
||
To Life membership fees |
xxxx |
By Journals and periodicals |
xxxx |
||
To Legacies |
xxxx |
By Books purchase |
xxxx |
||
To Tournament receipts |
xxxx |
By Honorarium paid |
xxxx |
||
To Sales of fixed assets |
xxxx |
By Scholarship |
xxxx |
||
To Sales of old assets |
xxxx |
By Trainer’s fees |
xxxx |
||
To Sales of investment |
xxxx |
By General expenses |
xxxx |
||
To Rent received (sublet) |
xxxx |
By Entertainment expenses |
xxxx |
||
To Interest received (on investment) |
xxxx |
By Seminar and party expenses |
xxxx |
||
To Dividend received |
xxxx |
By Insurance premium |
xxxx |
||
To Locker’s rent |
xxxx |
By Tournament expenses |
xxxx |
||
To Honorarium received |
xxxx |
By Interest on loan |
xxxx |
||
To Proceeds of lecturer |
xxxx |
By Repair/renewal expenses |
xxxx |
||
To Proceeds of concert |
xxxx |
By Travelling expenses |
xxxx |
||
To Sales of old newspaper |
xxxx |
By Loan paid |
xxxx |
||
To Sales of scrapes |
xxxx |
By Audit fees |
xxxx |
||
To Fees from patients* |
xxxx |
By Bank charge |
xxxx |
||
To Bed charges received* |
xxxx |
By Municipal tax |
xxxx |
||
To Other receipts or income |
xxxx |
By Help to needy (gratuity) |
xxxx |
||
|
|
By Medicines* (purchase) |
xxxx |
||
|
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By Furniture (purchase) |
xxxx |
||
|
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By Equipment (purchase) |
xxxx |
||
|
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By Land and building (purchase) |
xxxx |
||
|
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By Plant and machinery (purchase) |
xxxx |
||
|
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By Investment (made) |
xxxx |
||
|
|
By Other payment/expenses |
xxxx |
||
|
|
By Closing balance: |
|
||
|
|
Cash |
xxxx |
|
|
|
|
Bank |
xxxx |
xxxx |
|
|
xxxxx |
|
xxxxx |
Note: This asterisk (*) are related to hospital.
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1A
The following extracted data is given by DDR Club:
Transactions |
Amount $ |
|
|
|
Cash balance (1 January) |
10,500 |
|
Rent paid |
24,000 |
Subscription |
55,000 |
|
Electricity and telephone |
13,000 |
Entrance fees |
35,000 |
|
Magazines |
2,500 |
Donations received |
1,20,000 |
|
Sundry expenses |
15,000 |
Salary and wages Depreciation |
86,000 2,500 |
|
Computer purchase |
27,500 |
Required: Receipts and payments account for the year ended 31 December.
[Answer: Cash balance = $52,500]
SOLUTION:
Receipt and Payment Account
Of DDR Club
Receipt |
Amount $ |
Payment |
Amount $ |
To Opening balance |
10,500 |
By Salary and wages |
86,000 |
To Subscription |
55,000 |
By Rent paid |
24,000 |
To Entrance fees |
35,000 |
By Electricity and telephone |
13,000 |
To Donation |
1,20,000 |
By Magazines |
2,500 |
|
|
By Sundry expenses |
15,000 |
|
|
By Computer purchase |
27,500 |
|
|
By Closing balance (b/f) |
52,500 |
|
2,20,500 |
|
2,20,500 |
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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1B
MM Cultural Club had following extracted balances:
Particulars |
Amount $ |
|
|
Amount $ |
Opening balance |
25,000 |
|
Sales of old furniture |
5,000 |
Subscription |
1,50,000 |
|
Computer purchase |
22,000 |
Donation |
60,000 |
|
Concert expenses |
17,000 |
Proceeds from concert |
30,000 |
|
Entrance fees |
33,000 |
Salary and wages |
1,20,000 |
|
Miscellaneous expenses |
13,000 |
Electricity bill Outstanding rent |
4,000 6,000 |
|
Mobile and net expenses |
10,000 |
Required: Receipt and payment account
[Answer: Cash balance = $117,000]
SOLUTION:
Receipt and Payment Account
Of MM Cultural Club
Receipt |
Amount $ |
Payment |
Amount $ |
To Opening balance |
25,000 |
By Salary and wages |
1,20,000 |
To Subscription |
1,50,000 |
By Electricity bill |
4,000 |
To Donation |
60,000 |
By Computer purchase |
22,000 |
To Proceeds from concert |
33,000 |
By Concert expenses |
17,000 |
To Sales of old furniture |
5,000 |
By Miscellaneous expenses |
13,000 |
To Entrance fees |
30,000 |
By Mobile and net expenses |
10,000 |
|
|
By Closing balance (b/f) |
1,17,000 |
|
3,03,000 |
|
2,38,000 |
Keep in Mind (KIM)
1 |
Outstanding may be for income and expenses. |
|
If income (receivable): |
|
Credited in income and expenditure account |
|
Show in assets side of balance sheet |
|
If expenses (payable): |
|
Debited in income and expenditure account |
|
Show in liabilities side of balance sheet |
2 |
If fund and expenses are given in receipt and payment account or in the question: |
|
Deduct related expenses from fund in liabilities side of balance sheet |
|
Viz do not write expenses in debit side of income and expenditure account |
3 |
Outstanding is added with related expenses and is shown in liabilities side of balance sheet. |
4 |
Prepaid is deducted from related expenses and is shown in assets side of balance sheet. |
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PROBLEMS AND ANSWERS OF NON-TRADING CONCERN (NPO) |
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1A
The following extracted balances are given to you by a non-trading concern:
Cash balance (1 Jan) |
$15,000 |
|
Furniture purchase |
$15,000 |
Subscription |
80,000 |
|
Equipment purchase |
30,000 |
Donation |
60,000 |
|
Sundry expenses |
6,000 |
Sales of old news paper |
1,000 |
|
Life membership fees |
17,000 |
Salary |
90,000 |
|
Sundry receipt |
3,000 |
Water and electricity expenses Depreciation on furniture |
4,000 1,350 |
|
|
|
Required: Receipt and payment account
[Answer: Cash balance = $31,000]
Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = Br = P = Birr = Currency of your country
PROBLEM: 1B
MK Football Club has following extracted balances:
Opening balance |
$17,000 |
|
Sales of old furniture |
$5,000 |
Subscription |
120,000 |
|
Computer purchase |
30,000 |
Donation |
50,000 |
|
Tournament expenses |
12,000 |
Receipt from tournament |
21,000 |
|
Entrance fees |
25,000 |
Salary and wages |
120,000 |
|
Miscellaneous expenses |
13,000 |
Electricity bill expenses Water bill payable |
4,000 150 |
|
Mobile and net expenses |
8,000 |
Required: Receipt and payment account
[Answer: Cash balance = $51,000]
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