Not for profit organization do not deal with goods and services nor involve in credit transaction. Mostly their transactions are cash receipt and payment and minimum number of other books which are necessary for required information. These books may include the cashbook, membership register, fee collection register, and register for outstanding fee. All these registers may differ according to the information in which not for profit organizations are interested. Entries are recorded throughout the accounting period in this records. At the end of accounting period a nonprofit institution prepare final accounts which include the following accounts.
The cashbook contains a record of cash receipts and cash payments in chorological order. For example if a club receives subscription from its members on different dates of the accounting period, which member’s subscription will be recorded separately on the receiving date in the cashbook receipt side. Similar if club paid salaries to its employees, these will be recorded in different months in the cash book payment side. Here download receipt and payment account format in excel. The main difference between receipt and payment and income and expenditure account is that the former is the summary of cash transactions and the later is the replacement of profit and loss account which records and include revenue nature accounts.
A receipt and payment account is a summary of all receipts and payments under proper head, which take place during the accounting period. We can understand, in the cashbook similar type of transactions are summarized and their total amount is posted to the receipt account and payment account under the proper title.
Features of Receipt and Payment Accounts
- It is summary of cash book. All receipts are recorded on the debit left side and all payments are recorded on the credit right side.
- It starts with the cash or bank opening balances. The said balances are written on the debit and bank overdraft is recorded on the credit side of the accounts.
- It records all cash receipts and payments whether they are of capital or revenue nature or whether they relate to the current year or not.
- Similar type of receipt and payment are gathered under appropriate heads of accounts.
- It ends up with the balance of cash or bank at the end or accounting period.
How to Prepare Receipt and Payment Account
Below is the example of cash receipts and cash payments from the cash book for XYZ Club for the year 2000.
Cash in Hand Rs. 500
Cash at Bank Rs. 2500
Including Rs. 2000 for 1999 and Rs. 5000 for 2001.
Rent Paid 12000
Stationary charges 2000
Postage and telephone 1000
Staff salary 10000
Investment in prize bond 500
Investment in DSC 1000
Office equipment 1000
Closing cash balance 900
Receipts and Payments Account for the year 2000