Receipts & Payment Account:-This account provides summary of receipts and payments (cash and bank transactions) irrespective of whether related to current, previous and future period or whether transactions are of capital or revenue nature. This account is prepared by non-profit organization during a particular financial period.
Note:-This account does not deal with non-cash transaction like depreciation and nature of this account is of Real A/c
Income & Expenditure Account:- It is a summary of income and expenditure for particular accounting period. It is like profit and loss account. All the revenue items of current period are shown in this account.
Note: This account is prepared on accrual basis and nature of this account is of Nominal account.
| Receipts and Payments Account | Income and Expenditure Account |
|---|---|
| It is just like cash book. | It is like as profit and loss account. |
| It records both receipts and payment of capital and revenue nature. | it records income and expenditure of revenue nature. |
| The receipts and payments can be previous and future periods as well. | Income and expenditure items are related to current period only. |
| This account does not include non-cash item. | This accounts records non cash items. |
| Opening balance represents cash in hand/cash at bank/overdraft. | There is no opening balance in this account. |
| The receipts are recorded on debit side and payments are on credit side | Losses & expenses recorded on debit side and income and gains on credit side. |
| Closing balance represents cash in hand/cash at bank /overdraft at the end. | Balance at the end represents income over expenditure or vice-versa |