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SS2: FINANCIAL ACCOUNTING - 2ND TERM

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Similarities between Receipts and Payments and Income and Expenditure

1. Both accounts follow the principle of double entry.

2. They are summaries of financial statements.

3. Both are prepared by non-profit making concern

4. They are prepared to cover the same period.

Differences between Receipts and Payments and Income and Expenditure

Receipts and PaymentsIncome and Expenditure
1.Real AccountNominal Account
2.Only actual cash receipts and payments are recorded.Cash accruals and prepayment are included.
3.No record for depreciationGive effect to depreciation
4.Balance represents cash or bank overdraft.Balance represents the surplus of income or expenditure.
5.Receipts are debited and payment creditedExpenditure is debited and income is credited.
6.It includes the capital and revenue items.Only revenue items are recorded.

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