— Kishore V, SME and ACW at Edumarz.
The distinction between Income and Expenditure Account and Receipt and Payment Account:
Based upon discussion made in regard to the Receipts and Payments Account and the Income and Expenditure Account we make the distinction between Income and Expenditure Account and Receipts and Payments Account in the tabular form:
Basis | Income and Expenditure | Receipts and Payments |
Nature | It’s similar to a profit and loss statement | It is the cash summary. |
Nature of item | It just keeps track of revenue receipts and expenditures. | It keeps track of income receipts and payments, as well as capital. |
Period | The income and expense accounts are only for the current period. | Receipts and payment accounts can be linked to previous and subsequent periods. |
Debit side | This account’s debit side keeps track of costs and losses. | The receipts are recorded on the debit side of this account. |
Credit Side | The revenue and profits are recorded on the credit side of this account. | This account’s Credit side keeps track of payments. |
Depreciation | Depreciation is included. | Depreciation is not included. |
Opening Balance | There is no opening balance. | In the beginning, balancing represented cash on hand, cash in the bank, or an overdraft |
Closing Balance | The surplus or deficit of revenue overspending, and vice versa, is represented by the balance at the end. | The final balance reflects cash on hand, cash in the bank, or bank overdraft. |