Institutions that aren’t trading need to keep their books in order. Companies that do not trade keep a cash register and prepare a summary listing all cash transactions. This summary can also be called a receipts/payments record, reach recommended site.
These companies also prepare an income and expense account’, which is more on the lines Profit and Loss account, as well the Balance Sheet.
Accounting is about maintaining.
(iii). Keep a cash book in order to record receipts as well as payments.
(iii). Ledger used to classify transactions according to appropriate heads.
Receipts/payments account
It shows the cash balance for a period. The Receipts/Payments account displays all cash transactions under different heads. All receipts, cheque or cash, are entered on debit (receipts), but all payments (both cheques and cash) are displayed in credit (payments). These features will enable you to identify the nature of the payments account, receipts, and other details.
1. It is either a summary of cash books or a cash book. It shows recipients on the debit side.
Credit side payments
2. The “Cash” column combines bank items and cash. Receipts of cash and cheques go together in one column. Also, cheques and cash payments are combined in one column. Credit side is in one column. Contra entries between cash & bank are eliminated.
3. It is not part dual entry book-keeping. It is a summary book for cash that is part double entry.
4. Similar to cash books, it starts with the bank’s opening balance, and ends with that closing balance.
5. These accounts contain both capital receipts as well as revenue and payments. This account can also be used to track revenue and capital receivables. It records rent payments as also payments for building and machinery. On the receipts page, you will also find receipts related to subscriptions and machinery.
6. It typically shows a debit amount that is cash in bank or cash in hand. If there is an overdraft from the bank, it will also show credit.
7. Receipts or Payments accounts do not reveal any gains or loss made by the concern in the given period. It is prepared based on actual receipts. it records all receipts-irrespective of the period to which it relates (previous year, current year or future), (b) it also ignores the nature of the receipts and payments (whether capital or revenue). I
8. Accounting concept of gain/loss is based in “accrual thought”, which is impossible to think about because “receipts” isn’t capable of thinking about it. This means that it doesn’t disclose gains and losses (earned or sustained) during the period.