Differences Between Receipts And Payment Accounts And Income And Expenditure - SS2 Accounting Past Questions and Answers - page 1
What is the main difference between receipts and payments accounts and income and expenditure accounts?
Receipts and payments accounts are cash-based, while income and expenditure accounts are accrual-based.
Receipts and payments accounts only show income earned and expenses incurred, while income and expenditure accounts show all cash inflows and outflows.
Receipts and payments accounts show the actual cash balance of an organization, while income and expenditure accounts show the financial performance of the organization.
None of the above.
What is included in receipts and payments accounts?
All cash inflows and outflows of an organization.
Income earned and expenses incurred by an organization.
Assets and liabilities of an organization.
None of the above.
What is the purpose of income and expenditure accounts?
To show the actual cash balance of an organization.
To show the financial performance of an organization.
To identify the assets and liabilities of an organization.
None of the above.
What type of accounting are receipts and payments accounts?
Cash-based accounting.
Accrual-based accounting.
Both cash-based and accrual-based accounting.
None of the above.
What is the difference between accrual-based accounting and cash-based accounting?
Accrual-based accounting records income and expenses when they are earned or incurred, regardless of when cash is received or paid out, while cash-based accounting records income and expenses when cash is received or paid out.
Why is it important for organizations to maintain both receipts and payments accounts and income and expenditure accounts?
By maintaining both types of accounts, organizations can have a more comprehensive view of their financial position.