GENERAL KNOWLEDGE

Detailed explanation-1: -Receipts and payments Account is prepared by Non-Trading concerns. It acts like a cash account for the Non-Trading Concerns and helps in the making of income and expenditure of account which will show the deficit and surplus of the concern.

Detailed explanation-2: -The accounting for a non-trading concern is usually done as per the principle of the double-entry system of accounting. They usually only prepare and maintain a cash book to record receipts and payments made during the year. The cash book is transformed into a receipt and payment book at the end of the year.

Detailed explanation-3: -Non-trading organisations don’t prepare trading and profit and loss account, however they prepare Receipt and Payments account, Income and Expenditure account and Balance Sheet. Receipt and Payments account is a summary of cash receipts and cash payments, Income and Expenditure account is like profit and loss account.