Differences Between Receipts And Payment Accounts And Income And Expenditure - SS2 Accounting Past Questions and Answers - page 1
1
What is the main difference between receipts and payments accounts and income and expenditure accounts?
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A
Receipts and payments accounts are cash-based, while income and expenditure accounts are accrual-based.
B
Receipts and payments accounts only show income earned and expenses incurred, while income and expenditure accounts show all cash inflows and outflows.
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C
Receipts and payments accounts show the actual cash balance of an organization, while income and expenditure accounts show the financial performance of the organization.
D
None of the above.
2
What is included in receipts and payments accounts?
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A
All cash inflows and outflows of an organization.
B
Income earned and expenses incurred by an organization.
C
Assets and liabilities of an organization.
D
None of the above.
3
What is the purpose of income and expenditure accounts?
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A
To show the actual cash balance of an organization.
B
To show the financial performance of an organization.
C
To identify the assets and liabilities of an organization.
D
None of the above.
4
What type of accounting are receipts and payments accounts?
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A
Cash-based accounting.
B
Accrual-based accounting.
C
Both cash-based and accrual-based accounting.
D
None of the above.
5
What is the difference between accrual-based accounting and cash-based accounting?
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6
Why is it important for organizations to maintain both receipts and payments accounts and income and expenditure accounts?
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