A-AS Level (CIE) Accounting Paper-1: Specimen Questions with Answers 67 - 67 of 93

Question 67

Question

MCQ▾

Receipts and Payments Account records:

Choices

Choice (4)

a.

All the cash receipts and payment which have taken place during the year

b.

Only capital receipts and payments

c.

Only revenue receipts and payment

d.

Question does not provide sufficient data or is vague

Answer

a.

Explanation

  • It is prepared at the end of the accounting year based on cash receipts and payments recorded in this cash book. It is the summary of cash and bank transactions under various heads. Receipt and Payment account is prepared to show the true financial results of non- profit organizations. Receipt and payment account cannot disclose the All the information necessary for the preparation of this account is available from cash book. Various cash receipts and cash payments during true result of non-trading concern. Closing balance of Receipt and Payment account indicates cash in hand and cash at bank at the end of the financial year.
  • Thus, Receipt and Payment Account shows a summary of all the cash transactions in the cash book which is further analyzed or classified under various suitable heads, including the opening, and closing balance of a given period.

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