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CSEET · Fundamentals of Accounting · Accounting for Non-Profit Organizations

Which statement about the Receipts and Payments Account of a non-profit organization is correct?

The Receipts and Payments Account is a summary of the cash book, starting with opening cash and bank balances and ending with closing balances. It includes capital and revenue items of any period, and is a real account, not an accrual-based nominal account.

  1. AIt is a nominal account prepared on the accrual basis
  2. BIt excludes receipts and payments of capital nature
  3. CIt is a summary of the cash book that starts with opening cash and bank balances and ends with closing balancesCorrect
  4. DIt shows only items relating to the current year

Explanation

The Receipts and Payments Account is a real account summarising the cash book. It begins with opening cash and bank balances and ends with closing balances, and includes both capital and revenue items regardless of the period to which they relate. The other options describe features of the Income and Expenditure Account.

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