Receipts and Payments Account shows the receipts and payments without distinguishing between capital and revenue and also the period to which they relate. Why? (HOTS)
Dear student
Receipts and payment account is a type of Cash account , which is prepared in NPO . A Cash account is a account which will have all the entries , in which cash is involved , irrespective of nature of transaction or period to which they relate .
As it is a Cash account , it contains all the payments made by Org or all the money received by organisation irrespective of nature of transaction (Capital Or Revenue) or Period to which they relate .
E.G
An org paid 20,000/- for repairs and 500,000/- for new machinery in cash .
Here Both the entries will be passed in cash account irrespective their nature .
Regards
Receipts and payment account is a type of Cash account , which is prepared in NPO . A Cash account is a account which will have all the entries , in which cash is involved , irrespective of nature of transaction or period to which they relate .
As it is a Cash account , it contains all the payments made by Org or all the money received by organisation irrespective of nature of transaction (Capital Or Revenue) or Period to which they relate .
E.G
An org paid 20,000/- for repairs and 500,000/- for new machinery in cash .
Here Both the entries will be passed in cash account irrespective their nature .
Regards