Receipt and Payment Accounting

Receipt and Payment Accounting

Some organization follows receipt and payment accounting. Receipt and payment account basically a summary of cash account. Some organization in the country does not prepare the account on the bases of cash receipt and payment. These organizations include clubs, societies. Characteristics of receipt & payment are listed below.

a)    Receipt and Payment are Summary of Cash transactions.

b)   Cash & bank transaction are merged and reported in one column.

c)    Receipt & payment account shows opening and closing balance of cash.

d)   All transactions are taken into account.

e)    Receipts are recorded on the debit side.

f)     Payments are recorded on credit sides.

g)   Receipt and payment account gives no information about profit or loss.

h)   Income & Expenditure statement is prepared for (surplus or deficit).

List of Organization use the Receipt & Payment Accounting

Following is broad list of organization, which may use receipt & payment account.

a)    Clubs (Sport Club, Hiking Club, and Community Clubs etc).

b)   Societies (Housing Societies, )

c)    Hospitals

d)   Educational institutions.

Receipt & Payment Accounting Example

ABC Company has started as sports club with amount of 50,000. During the year following transaction happened.

Subscription received	120,0000
Salaries paid	20,000
Furniture purchased	10,000
Sport Equipment purchased	80,000

Calculate receipt & payment account, income & Expenditure account and Statement of financial position.

Solution

Receipt & Payment Account

Particulars	Dr.	Particulars	Cr.
Opening Balance	50,000	Salaries	20,000
Subscription	120,000	Furniture	10,000
		Sport Equipment	80,000
		Closing Balance	60,000
	170,000		170,000

Income & Expenditure Account

Income	Dr.	Expenditure	Cr.
Subscription	120,000	Salaries	20,000
		Surplus	100,000
	170,000		170,000

Statement of Financial Position

Capital	50,000
Surplus	100,000
	150,000
Furniture	10,000
Sports	80,000
Cash	60,000
	150,000