Characteristics of Receipt & Payment

Characteristics of Receipt & Payment

Characteristics of receipts & payment can be explained in term of cash summary, cash & bank, recording of transactions, reflection of revenue & capital expenditure.

Important Characteristics of Receipt & payment:

Important characteristics of receipt & payment account have been briefly explained below;

1.   Summary of Cash Transaction:

Receipt & payment account is summary of all financial transactions made in cash. Receipt & payment is a consolidated both cash and bank transaction. Thus we can say that receipt & payment account is a consolidated summary of cash transaction reflect both cash and bank transactions of the organization.

Receipts are reflected on the left side, while payments are reflected on right side of the receipt and payment account.

2.   Reflection Revenue & Capital expenditure:

Receipt and payment reflect both revenue and capital expenditure.

3.   Basic information:

Receipt & payment summary provides basic information about the following

a)    Opening balance of funds.

b)   Fund received during year.

c)    Fund consumed during the year

d)   Closing balance funds.

4.   No profit & loss information:

Receipt & payment account does not give any information about the profit or loss of the organization. A Separate account is prepared for profit or loss calculation is called income & expenditure account.

5.   Format of Receipt & payment Account:

Receipt and payment account can be prepared as following.

Receipt	Rupees	Payment	Rupees
Opening Bal	10,000	Salaries	10,000
Donations	5,000	Rent	5,000
Fees	5,000	Closing Balance	5,000
	20,000		20,000

Characteristics List of Receipt & Payment Account

Some important characteristics of receipt & payment account are listed below

a)    It is a cash summary of transaction.

b)   It reflects both revenue & capital expenditure made in cash.

c)    It has no direct link with profitability.

d)   It shows the opening and closing balance of cash & bank.