Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 9 - No. 31)
What is the key difference between a receipts and payments account and an income and expenditure account?
The receipts and payments account only includes cash transactions, while the income and expenditure account includes both cash and non-cash transactions.
The receipts and payments account records income, while the income and expenditure account records expenses.
The receipts and payments account is a statement of financial position, and the income and expenditure account is a statement of income and expenditure.
The receipts and payments account focuses on the organization's assets, while the income and expenditure account focuses on liabilities.
Explanation
The receipts and payments account only focuses on cash, whereas the income and expenditure account also considers non-cash items.
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