S. No.
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Particulars
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1.
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Cash and Non cash transaction
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Only cash transactions are recorded here.
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It is not confined to, cash transactions only, i.e. non-cash transactions are also included in it.
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2.
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Shows an items
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Receipts are shown on the debit side and payments on the credit side.
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All revenue incomes appear on the credit side and expenditure on the debit side.
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3.
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Capital and revenue items
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It includes both capital and revenue receipts & payment
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It includes only income and expenditure of revenue nature
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4.
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Balance sheet
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It includes both capital and revenue items, so it need not necessarily be accompanied by a Balance Sheet.
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It includes only revenue items, so it must be accompanied by a balance sheet, the balance sheet contains the remaining balances.
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5.
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Type of Account
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It is a Real Account
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It is a Nominal Account
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6.
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Transfer of Closing Balance
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Its balance is carried over to Receipts & Payments Account of the next year.
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Its balance is transferred to Capital Fund.
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7.
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Opening Balance
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This account shows opening balance except in the first year.
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It has no opening balance.
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8.
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Transactions
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Transactions relating to past, present and futures are recorded.
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Transactions relating to current year only are recorded.
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9.
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Adjustment
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Adjustments are not considered, because it is prepared on cash basis of accounting.
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Adjustments are considered necessary because it is prepared on accrual basis of accounting.
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10.
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Use of Double Entry System
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The double entry bookkeeping system is not followed while its preparation.
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Double entry bookkeeping system is followed strictly while its preparation.
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11.
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Compulsory
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Its preparation is not compulsory.
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It is compulsory. It must be prepared in order to ascertain the true result of a concern.
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12.
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Closing Balance
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Closing balance of this account represents the closing cash in hand and at bank or overdraft at bank.
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Closing balance of this account indicates either excess of income over expenditure or excess of expenditure over income.
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