BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Accruals
|
|
|
Prepayments
|
|
|
Depreciation of fixed assets
|
|
|
Purchase of fixed assets
|
Detailed explanation-1: -Purchase of fixed assets includes cash. It is recorded in Receipts and Payments Account.
Detailed explanation-2: -A Receipt and Payment account is simply a summary of the cash transactions as in the cash book, including opening and closing balances. All cash receipts and cash payments find place in this account whether they are of revenue nature or capital nature.
Detailed explanation-3: -Receipt and payment account records all the cash transactions which take place during the business operations. These transactions can be revenue or capital in nature. Receipt and payment account is also called a summarized cash book. Hence, all the transactions are to be recorded on cash basis only.
Detailed explanation-4: -Purchase of fixed assets requires cash and therefore it is recorded in the receipts and payments account, as the receipts and payments account manages the records of all cash receipts and payments in a non-profit organisation. Also read: Income and Expenditure Account. Receipt and Payment Account.
Detailed explanation-5: -Examples of fixed assets include land, machinery, vehicles, furniture, computer equipment, buildings, and other equipment. Fixed assets differ based on a company’s business operations.