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Answer» Differences between Receipt and Payment Account and Income and Expenditure Account are as follows: | Basis | Receipt and Payment Account | Income and Expenditure Account | | 1. Nature | It is a classified summary of the cash and bank transactions. It is an asset account. | It is like a profit and loss account of a trading concern. It is a nominal account | | 2. Kinds of items | It includes items relating to not only the current year but also to previous year and succeeding years. | It shows only the items and their amounts relating to only the current | | 3. Nature of items | It records receipts and payments of both capital and revenue nature. | It records income and expenditure of revenue nature only. | | 4. Non- cash items | It does not record non-cash items like depreciation etc. | It records non-cash items like depreciation etc. | | 5. Closing Balance | Its closing balance represents cash in hand and cash at bank or overdraft. | Its closing balance represents either surplus or deficit. |
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