cash and bank payments . Steps to Prepare Receipt and Payment Account : -
1st Step : To open Receipt and Payment Account It starts by showing the opening balance of cash and bank in its debit side . 2nd Step : To Record the Transactions We record only cash and bank related transactions in it . a ) Debit side
In the debit side , we record only all the incomes and receipts which is in the cash and bank form . For example , we have give temple space on rent and we get money . This will show in the debit side of receipt and payment account . We will not show donation in kind . For example , we get the clothes for poor children . Its value will not show in the debit side of receipt and payment account .
b ) Credit Side
In the credit side , we record only all the all expenses and payments which is in the cash and bank form . For example , we have take office on rent and we give money . This will show in the credit side of receipt and payment account . We will not show any outstanding expense in it . For example , we have to given salaries to our employees but still end of year we did not pay . This is outstanding expense but we will show in receipt and payment account .
3rd Step : Recording of Transfer to or From Bank .
If any cash is transferred to bank or withdraw from bank , it is not recorded in receipt and payment account because we use only one column both cash and bank receipt and payment . If we are interested to make bank reconciliation statement . We have to make a bank account which will record all bank related transactions only .
4th Step : Closing of Receipt and Payment Account We take the difference of debit and credit side of this account . If debit side