Receipts and Payments vs Income and Expenditure Accounts
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Comparison of Accounting Statements
| # | Receipts and Payments Account | # | Income and Expenditure Account |
|---|---|---|---|
| 1 | A summarized statement of all cash transactions during an accounting year. | 1 | An account of revenue income and revenue expenditure for an accounting year. |
| 2 | Only cash transactions are recorded. | 2 | Not confined to cash; non-cash transactions are included. |
| 3 | Records income or expenditure received or paid in cash during the year. | 3 | Records the total amount of income or expenditure, regardless of cash payment. |
| 4 | Cash receipts are on the Debit side; cash payments are on the Credit side. | 4 | Expenditures are on the Debit side; incomes are on the Credit side. |
| 5 | Includes both capital and revenue transactions. | 5 | Includes only revenue transactions. |
| 6 | The balance can never be a credit balance. | 6 | The balance may be either debit or credit. |
| 7 | The balance is carried over to the next year's Receipts & Payments Account. | 7 | The balance is transferred to the Capital Fund. |
| 8 | Shows an opening balance (except in the first year). | 8 | Has no opening balance. |
| 9 | The closing balance represents cash in hand or at bank. | 9 | The closing balance represents surplus (credit) or deficit (debit). |
| 10 | Prepared on a cash basis; includes past, present, and future transactions without adjustments. | 10 | Prepared on an accrual basis; includes adjustments for accruals, prepayments, and outstanding items. |
| 11 | Essentially an abridged Cash Book. | 11 | Similar to a Profit & Loss Account for profit-seeking businesses. |
| 12 | Operates outside the Double Entry system. | 12 | Operates within the Double Entry system. |
| 13 | Not necessarily accompanied by a Balance Sheet. | 13 | Accompanied by a Balance Sheet. |
| 14 | Preparation is not compulsory. | 14 | Compulsory to ascertain the true financial result of a concern. |