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Difference between Receipt and Payment Account and Income and Expenditure Account


Difference between Receipt and Payment Account and Income and Expenditure Account-

S. No.



Cash and Non cash transaction

Only cash transactions are recorded here.

It is not confined to, cash transactions only, i.e. non-cash transactions are also included in it.


Shows an items

Receipts are shown on the debit side and payments on the credit side.

All revenue incomes appear on the credit side and expenditure on the debit side.


Capital and revenue items

It includes both capital and revenue receipts & payment

 It includes only income and expenditure of revenue nature


Balance sheet

It includes both capital and revenue items, so it need not necessarily be accompanied by a Balance Sheet.

It includes only revenue items, so it must be accompanied by a balance sheet, the balance sheet contains the remaining balances.


Type of Account

It is a Real Account

It is a Nominal Account


Transfer of Closing Balance

Its balance is carried over to Receipts & Payments Account of the next year.

Its balance is transferred to Capital Fund.


Opening Balance

This account shows opening balance except in the first year.

It has no opening balance.



Transactions relating to past, present and futures are recorded.

Transactions relating to current year only are recorded.



Adjustments are not considered, because it is prepared on cash basis of accounting.

Adjustments are considered necessary because it is prepared on accrual basis of accounting.


Use of Double Entry System

The double entry bookkeeping system is not followed while its preparation.

Double entry bookkeeping system is followed strictly while its preparation.



Its preparation is not compulsory.

It is compulsory. It must be prepared in order to ascertain the true result of a concern.


Closing Balance

Closing balance of this account represents the closing cash in hand and at bank or overdraft at bank.

Closing balance of this account indicates either excess of income over expenditure or excess of expenditure over income.



God on 11/7/2020 12:13:25 PM says:
Man on 11/7/2020 12:12:47 PM says:
God on 11/7/2020 12:12:13 PM says:

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