Receipt and Payment Account

2.  It is prepared at the end of the accounting year
on the basis of cash receipts and payment
recorded in this Cash Book.
 It is summary of cash and bank transaction
under various heads.

3.  “Receipt and Payment Account is the summary of cash
and bank transaction which helps in the preparation of
Income and Expenditure Account and the Balance
Sheet”.
 In other words, Receipt and Payment Account is simply
a summary of cash transactions as in the cash book
analyzed or classified under suitable headings, including
the opening and closing balance.

4.  It is a real account.
 Receipts are recorded in the debit side.
 Payment are recorded in the credit side.
 The receipt and payment are classified into appropriate
headings.
 It bears proper heading with the name of the
organization.
 No adjustments are made for depreciation, bad debts
etc. in this account.

5.  Total receipts and total payments under various heads are
available at a glance.
 The amount of cash in hand at the year end can be
ascertained.
 The correctness of cash book can be verified through it.
 The total of debit side of Cash Book will agree with that of
receipts side of Receipt and Payment Account, whereas the
total of credit side of Cash Book will agree with that of
payment side of Receipt and Payment Account,

6.  It does not disclose the accurate income and expenditure
during the current year.
 It does not disclose the surplus or deficiency of the
institution but simply disclose the balance.
 Trial Balance cannot be drawn on the basis of this
account.
 It is not prepared on accrual basis.
 It cannot be used by a concern where credit transactions
take place in large number.