BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Balance Sheet
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Profit and Loss A/c
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Income and Expenditure A/c
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Receipt and Payment A/c
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Detailed explanation-1: -Non-cash items are those that do not involve the use of cash. Items such as depreciation, outstanding expenses, accrued income etc. are not shown in receipt and payment account because it is a real account. only cash transactions are recorded in Receipt and payment account.
Detailed explanation-2: -Disadvantages of Receipts and Payment Account It fails to show the transactions on an accrual basis. It does not define any targets making it incapable of showing surpluses and deficits at the end of the year. Receipts and payments account does not show Non-Cash transactions like depreciation of assets, pilferage etc.
Detailed explanation-3: -It prepared to list down all the receipts and payments. There is no outflow of cash due to loss on sale of old furniture, hence not to be recorded in receipts and payments account.
Detailed explanation-4: -Since credit sales are the payments which are pending for some time after the delivery of the purchased goods and products, these are not recorded in cash books. They need to be recorded separately in a daily book.
Detailed explanation-5: -A receipt and payment account is a summarized cash book. It records all cash transactions whether it is revenue nature or capital nature. The Receipt and Payment account has debit side to record all receipts and credit side to record all payments made by not for profit organisation during a year.