DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : N. USHA RANI
Designation : Lecturer
Branch : Commercial & Computer Practice (CCP)
Institute : GPW/Guntur
Year/Sem : III Sem
Sub-Code : CCP-302
Subject : ACCOUNTANCY-II
Topic : Non-Trading Concerns
Duration : 50 minutes
Sub Topic : Features of Receipts and Payments A/c
Teaching Aids : PPT, ANIMATIONS
CCP302.57 1
Objectives

On completion of this period, the you would be

able to
 Understand the features of Receipts and Payments
Account

CCP302.57 2
• Does your father pay Current bill every month?
• Does he obtain Current bill receipt?
• List some examples when you will obtain receipt?

CCP302.57 3
Features of Receipts & Payments
Account:
It is a
Real account in nature
Summary of Cash book for a year
Contains all Bank transactions for a year.
Contains all Cash Receipts.
Contains all Cash Payments.

CCP302.57 4
Features of Receipts & Payments
Account: (Contd.,)

 Cash Payments irrespective of their nature i.e.,

pertains to present, future, or past period are entered.
 Cash payments includes both Capital nature and
Revenue nature.
 Commences with opening Cash or Bank Balance
 Ends with closing Cash or Bank Balance

CCP302.57 5
Features of Receipts & Payments
Account: (Contd.,)

Only Actual Cash Transactions will be entered.

This account is divided into debit and credit form
Debit side records all the receipts of Cash or Cheque
Credit side records all the payments

CCP302.57 6
Features of Receipts & Payments
Account: (Contd.,)

 It includes all the Receipts and Payment both of

Capital and Revenue nature.
 Receipts and payments of previous or future years
also included
 But the transactions have to occur during the current
period
 Generally prepared at the end of each year from the
Cash Book.

CCP302.57 7
Features of Receipts & Payments
Account: (Contd.,)

 All receipts and payments are brought under

important Heads.
 Total yearly Receipts and Payments against each
Head are recorded in Receipts & Payments
Account.
 Example: Total subscriptions under “ Subscription Account ”,
Donations under “ Donations Account”.

CCP302.57 8
Features of Receipts & Payments
Account: (Contd.,)

 The difference between the two sides represents Cash

in hand.
 Preparation of this account reveals Cash Position at the
end of the year
 Cannot reveal profit or loss.

CCP302.57 9
Proforma of Receipts and Payments Account
Receipts Rs. Payments Rs.
To Balance b/d (opening): By Captial Payments
Cash in Hand Purchase of assets
Cash at Bank. loans & advances
Captial Receipts : By Revenue payments.
sale of Assets Salaries, Rents
Donations Interest, Periodicals
Legacies honorarium
Life Membership fee
Entrance fee By Balance c/d : (closing)
To Revenue Receipts Cash in Hand
Subscriptions Cash at Bank.
interest
Income from sports

CCP302.57 10
To Miscellaneous
Example (1):
A Rotary Club started on Jan 1st, 2002. During the year
ending 31st Dec.1973, its Receipts and Payments are as
under:
Receipts: Subscriptions ----- Rs. 8,500
Donations ------ Rs. 1,000
Payments: Investments ------- Rs. 4,500
Rent ------- Rs. 1,000
Printing & Stationery ------- Rs. 200
Salary -------- Rs. 1,000
Postage ------- Rs. 80
Sundries ------- Rs. 220
On December 31st, 2002 Cash and Bank Balances were
Rs.500, Rs.2,000 respectively. Prepare Receipts and
Payments account for the year 2002.
CCP302.57 11
Solution:
Dr. Receipts and Payments Account for the year ending 31-3-2002 Cr.

RECEIPTS Rs, PAYMENTS Rs.

To Subscriptions 8,500 By Investments 4,500
To Donations 1,000 By Rent 1,000
By Printing & Stationery 200
By Salary 1,000
By Postage 80
By Sundries 200
By Balance c/d
Cash in Hand 500
Cash at Bank 2,000
9,500 9,500

CCP302.57 12
Summary
 At the end of the financial year,
 Receipts and Payment account is prepared in Non-
trading concerns
 It is similar to Cash Book – but the accounts are shown
under different heads.
 All the Receipts (capital & Revenue ) originally received
by way of cash or cheque are shown on the debit side,
irrespective of the financial year (i.e., last year, current
year & next year) for which it is received.

CCP302.57 13
Summary contd.
 All the Payments (capital or Revenue expenditure)
originally paid by the way of cash or cheque are
shown on the credit side, irrespective of the financial
year (i.e., last year, current year & next year).
 The opening Balance is shown at the beginning of
the debit side of the Receipt & payment Account.
 The Balancing figure is closing Balance of that
particular year

CCP302.57 14
QUIZ

(1)Receipts and Payments Account is an

abbreviated copy of

• Cash Book
• Subsidiary Book
• Petty Cash Book
• None of the Above

CCP302.57 15
 QUIZ CONTD

• Receipts and Payments Account begins with

a) Capital Receipts
b) Opening balance of Cash in hand and at Bank
c) Sundries
d) None of the Above

CCP302.57 16
 QUIZ CONTD

(1)Receipts and Payments Account ends with

closing Cash or Bank balance.
a) True
b) false

CCP302.57 17
QUIZ CONTD

(1)In Receipts and Payments Account actual

Cash Transactions will be entered.

a) Yes
b) No

CCP302.57 18
 QUIZ CONTD

(5) In Receipts and Payments Account all the

receipts of Cash or Cheque entered on the
a) Debit side
b) Credit side

CCP302.57 19
QUIZ CONTD

• In Receipts and Payments Account all

payments entered on.
• Credit side
• Debit side
• Some in debit side and some in credit side
• Not posted at all

CCP302.57 20
 QUIZ CONTD

• Receipts and Payments Account includes

all the receipts and payments of
a) Both Capital and Revenue nature
b) Only Capital nature
c) Only Revenue nature
d) None of the above

CCP302.57 21
QUIZ CONTD

• Receipts and Payments Account prepared at

the end of the year
a) Yes
b) No

CCP302.57 22
 QUIZ CONTD

(1)The difference between the two sides of

Receipts and Payments Account represents
a) Cash in Hand
b) Closing stock
c) Opening stock
d) None of the above

CCP302.57 23
 QUIZ CONTD

(10) Receipts and Payments Account does

not reveal Profit or Loss, but Cash
position.

a) Yes
b) No

CCP302.57 24
Frequently Asked Questions

• Explain the features of Receipts and Payments Account.

• Draw the Proforma of Receipts and Payments Account.

CCP302.57 25
Assignment
1. Solve two problems from your text book related to
Receipts and Payments Account

CCP302.57 26