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Distinction between Receipts and Payments Accounts and Income and Expenditure Accounts

Receipts and Payments Accounts

Income and Expenditure Account

 

Similar to a cash account showing total cash receipts and total cash payments during a particular period.

Similar to Profit and Loss account showing incomes and expenses arising during a particular period.

There is an opening balance representing cash or bank balance

No opening balance

Records all cash receipts and cash payments whether capital or revenue in nature.

Only records income and expenses of revenue nature

Records all receipts and payments irrespective of their relation to this year, previous year or next year.

Records only receipts and expenses relating to the current year.

At the end of the year excess of receipts over payments shows a positive cash balance whereas a negative balance signifies an overdraft

Excess of income over expenditure represents net income whereas vice versa represents a net loss.

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