Receipt and payment account and income and expenditure account both are prepared in not-for profit organisations. Both are useful for preparing financial statement in these organisation. But both are different features. We can show the difference between receipt and payment account and income and expenditure account on the following basis.
|Basis of Difference|
Receipt and Payment A/c
| Income and Expenditure A/c|
Receipt and payment account is the account which is made just like cash book.
|Income and expenditure account is the account which is made just like profit and loss account.|
|2. Nature of Account||It is current asset account||It is nominal account for matching of incomes and expenditures of not-for-profit organisation.|
|3. Debit and Credit Side||Debit Side of this account shows receipts and credit side of this account shows only payments.||Debit side of this account shows different incomes like donation and subscription fees etc. Credit side of this account shows all the expenses.|
|4. Capital and Revenue items||We record both capital and revenue item in it but it must be in cash or through bank.|
We record only revenue items. All capital nature income and expenditure will not show in it.
|5. Balance after closing of account||If we close this account, balance at closing account will show the cash at hand and at bank or bank overdraft. ||If we close this account, balance of this account will show the surplus (net profit or deficiency (net loss)|
|6. Cash Basis and Accrual Basis||Receipt and payment account follows only cash basis of accounting.||Income and expenditure account follows only accrual basis of accounting. It means, whether we pay or receive in cash or these are still credit, we records only current year income and expenditures. We do all the adjustments of outstanding income and expenditures and advance incomes and expenditures in this account.|