The income and expenditure account differs from receipts and payments account because it
FINANCIAL
JAMB 2016
The income and expenditure account differs from receipts and payments account because it
- A. accounts for notional charges
- B. records transactions that relate to the period on cash basis
- C. records transactions that relate to the period on accrual basis
- D. accounts for balance of cash at bank
Correct Answer: B. records transactions that relate to the period on cash basis
Explanation
Receipts and payments account is a summary of cash transactions for a period and it is a real account. Income and expenditure account is a summary of expenditure and income like trading and profit and loss account and it is a nominal account.
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