In the financial Statements of Not-for-profit organisations, one of the statement Receipt and Payment account is also prepared along with the Income and Expenditure Account and Balance Sheet.
Meaning of the Receipts and Payments account: –
It is just a summary of the all-cash transactions (including transactions done through the Bank) related to receipts and payments made by the organisation during a relevant accounting period. This account is being prepared at the end of the financial year along with the income and expenditure account and balance sheet.
The cash book and Receipts and Payment A/c both provide the same information but in a different manner. In the cash book, all the transactions are recorded in chronological order but in Receipts and Payment A/c, the only summary of accounts are shown at the end of the relevant accounting period. The Receipts and Payment A/c does not give the date of Transactions.
In the Receipts and Payment A/c, all the cash receipts are recorded on the debit side and all cash payments are recorded on the credit side of the account.
Example of Receipts and Payments Account: –
We have created two examples for you, One is with a favourable bank balance (under draft) and another is with an unfavourable bank balance(Overdraft). These are shown as under: –
1. With Favourable Bank Balance: –
Question:
Please prepare the Receipt and payment account as of 31/03/2020 from the following information:
| Name of Accounts | Amount | Name of Accounts | Amount |
| Cash In Hand as on 31/03/2019 | 25000 | Investment | 158000 |
| Cash at Bank as on 31/03/2019 | 150000 | Land and Building | 450000 |
| Subscriptions received | Legacies | 400000 | |
| For 2019-20 | 5000 | Life Membership fee | 50000 |
| For 2020-21 | 500000 | Miscellaneous Expenses | 125 |
| For 2021-22 | 25000 | Miscellaneous Receipts | 200 |
| Subscription for Specific services | 10000 | Municipal Taxes | 1750 |
| Admission Fee | 15000 | Newspapers and Magazines, etc. | 5000 |
| Advertisement | 15000 | Office Expenses | 5900 |
| Audit Fee | 22500 | Postage and Telegram | 725 |
| Books | 5700 | Printing and Stationery | 6700 |
| Dividend Received | 11000 | Prize and rewards | 12500 |
| Donation for Specific Assets or purpose | 250000 | Purchase of Fixed Assets | 495000 |
| Endowment Fund | 6000 | Receipts on Account of Specific Fund | 75000 |
| Entrance Fee | 35000 | Rent paid | 24600 |
| General Donations | 60000 | Rent Received | 18000 |
| General Grants | 15000 | Repair and Maintenance | 8900 |
| Grant for Specific Assets or purpose | 100000 | Salaries | 50000 |
| Honorarium | 6900 | Sale of old Assets | 7800 |
| Insurance | 35000 | Sale of Scrap | 1200 |
| Interest paid | 1250 | Sports Equipment | 75600 |
| Interest Received | 13000 | X’s Loan (Repaid) | 60000 |
Solution:
2. With Unfavourable Bank Balance: –
In this example, we have just changed the bank balance.
Question:
Please prepared the Receipt and payment account as of 31/03/2020 from the following information:
| Name of Accounts | Amount | Name of Accounts | Amount |
| Cash In Hand as on 31/03/2019 | 25000 | Investment | 158000 |
| Bank Overdraft as on 31/03/2019 | 995079 | Land and Building | 450000 |
| Subscriptions received | Legacies | 400000 | |
| For 2019-20 | 5000 | Life Membership fee | 50000 |
| For 2020-21 | 500000 | Miscellaneous Expenses | 125 |
| For 2021-22 | 25000 | Miscellaneous Receipts | 200 |
| Subscription for Specific services | 10000 | Municipal Taxes | 1750 |
| Admission Fee | 15000 | Newspapers and Magazines, etc. | 5000 |
| Advertisement | 15000 | Office Expenses | 5900 |
| Audit Fee | 22500 | Postage and Telegram | 725 |
| Books | 5700 | Printing and Stationery | 6700 |
| Dividend Received | 11000 | Prize and rewards | 12500 |
| Donation for Specific Assets or purpose | 250000 | Purchase of Fixed Assets | 495000 |
| Endowment Fund | 6000 | Receipts on Account of Specific Fund | 75000 |
| Entrance Fee | 35000 | Rent paid | 24600 |
| General Donations | 60000 | Rent Received | 18000 |
| General Grants | 15000 | Repair and Maintenance | 8900 |
| Grant for Specific Assets or purpose | 100000 | Salaries | 50000 |
| Honorarium | 6900 | Sale of old Assets | 7800 |
| Insurance | 35000 | Sale of Scrap | 1200 |
| Interest paid | 1250 | Sports Equipment | 75600 |
| Interest Received | 13000 | X’s Loan (Repaid) | 60000 |
Solution:
Format of Receipt and Payment Account: –
We have created the receipts and Payments A/c format in PDF and Excel. These are shown below: –
1. Format in Excel: –
Download the Excel Sheet from the below link. It has two worksheets
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- Format for favourable bank Balance
- Format for Unfavourable Bank Balance
2. Format in PDF: –
Download the PDF from the below link.
- Format of Receipt and Payment A/c – Favourable Bank Balance
- Format of Receipt and Payment A/c – Unfavourable
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