Balance Sheet

Balance Sheet
Assets
Rs.
Liabilities
Rs.
Furniture
250
Capital Fund
757
Less Depreciation @ 10 %
25
225
(Excess of income over
Books
300
Expenditure)
Less Depreciation @ 10 %
25
275
Creditors (Rafi & Co.)
50
Cash in hand
302
Subscription received
Accrued Subscription
45
in advance
20
Prepaid Rent
40
Outstanding Salaries
60
887
887
RECEIPTS AND PAYMENTS ACCOUNT
Generally, in examination problems an account styled "Receipts & Payments Account" and some additional information are given with the help of which Final Accounts are to be prepared. Now let us see what Receipts & Payments Account is? All the information necessary for preparation of this account is available from Cash Book. Various cash receipts and cash payments during the whole year find place in this account in a classified manner. Its closing balance indicates cash in hand and cash at bank at the year-end. It may be noted that Receipts & Payments Account cannot disclose the true result of a concern - it is ascertained through Income & Expenditure Account. =-DEFINirrONS:
"A Receipts and payments Account is a summarized Cash Book (cash and bank) for a given period".— Spicer and Pegler.
"This (Receipts and Payments Account) is simply a summary of the cash transactions as in the CashBook, analyzed and classified under suitable headings, including the opening and closing balances".— R.N. Carter.
Thus the account which is prepared at the year end in a summarized form with all the cash receipts and cash payments during the year arranged in a classified form, is called Receipts and Payments Account.
CHARACTERISTICS:
The following are the features of Receipts and Payments Account:
It is an abridged edition of Cash Book it is, in effect, a summary of Cash Book.
All cash receipts during the whole year are recorded on its left-hand (i.e., Debit) side, whileall cash payments during the whole year are written on its right-hand (i.e. Credit) side,arranged in a classified form.