Difference between receipt and payment account and income and expenditure account

The main points of difference between receipt and payment account and Income and expenditure account may be described as under:

Nature:

Receipt and payment account: It is a summary of cash transactions.
Income and expenditure accountIt is another name of income and expenses summary as adopted in non-trading concern.

Commencement

Receipt and payment account: It must necessarily commence with the opening ba!ance of cash brought over from the preceding period if any.
Income and expenditure account: it does not commence with any balance.

Items include

Receipt and payment account: It may include receipts and  payments pertaining to preceding or succeeding period
Income and expenditure account: lt must include only income and expense, belonging. to the period under review.

Capital and revenue items

Receipt and payment account: It includes both capital and revenue receipts & payment.
Income and expenditure account: It includes only income and expenditure of revenue nature.

Placing of items

Receipt and payment account: in receipt and payment account receipts are shown on the debit side and payments on the credit side.
Income and expenditure account: If it is prepared in account form all revenue incomes appear on the credit side and expenditure on the debit side.

Balance of account

Receipt and payment account: The difference between receipts and the payments represents the balance of cash in hand or at bank or bank overdraft at the closing date.
Income and expenditure account: The difference of Income and expenditure represents either surplus or deficit balance.

Outstanding items

Receipt and payment account: It restricts itself to cash transactions only and does not take into account any outstanding Income or expenditure
Income and expenditure account: It includes all incomes whether received or not and all expenses whether paid or not relating to the period under review.

Carrying of balance

Receipt and payment account: The balance of receipts and payments account is carried to the next period.
Income and expenditure account: The balance of income and expenditure account is not carried to the next period but is added in or deducted from the accumulated.

Balance sheet

Receipt and payment account: A receipts and payments account need not necessarily be accompanied by a balance sheet.
Income and expenditure account: An income and expenditure account must be accompanied by a balance sheet for the period concerned.

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