DEPARTMENT OF TECHNICAL EDUCATION

GOVERNMENT OF ANDHRA PRADESH

Name : N. USHA RANI

Designation : Lecturer
Branch : Commercial & Computer Practice (CCP)
Institute : GPW/ Guntur
Year/Sem : III Sem
Sub-Code : CCP-302
Subject : ACCOUNTANCY-II
Topic : Non-Trading concerns
Duration : 50 minutes
Sub Topic : Preparation of R&P A/C, Problems-I
Teaching Aids : PPT ANIMATIONS
CCP 302.62 1
 Objectives

On completion of this period you would be able

to:

Prepare the Receipts and Payments Account.

CCP 302.62 2
1. What is Receipts payment Account?
2. How it is prepared?

CCP 302.62 3
 Recap:-

 Receipts and Payments Account is a summary of

cash and Bank transactions for a year
 It commences with opening cash/Bank balance and
ends with the closing cash/bank balance

 Receipts are entered on Debit side and payments on

credit side
 It includes all the receipts and payments of Capital
and Revenue nature

CCP 302.62 4
Preparation of Receipts and Payments
Account

CCP 302.62 5
Proforma of Receipts and Payments Account
Receipts Rs. Payments Rs.
To Balance b/d (opening): By Captial Payments
Cash in Hand Purchase of assets
Cash at Bank. loans & advances
Captial Receipts : By Revenue payments.
sale of Assets Salaries, Rents
Donations Interest, Periodicals
Legacies honorarium
Life Membership fee
Entrance fee By Balance c/d : (closing)
To Revenue Receipts Cash in Hand
Subscriptions Cash at Bank.
interest
Income from sports
CCP 302.62 6

To
Example : 1

Karvali Club is started on January 1,1999.

During the year ending 31st Dec, 1999, its
receipts and payments are as under:

Receipts :

Subscriptions ----- Rs.5,000

Donations ----- Rs.2,250

CCP 302.62 7
 Payments :

Investments ----- Rs.1,500 ;

Rent ----- Rs. 900;
Printing & Stationery ----- Rs. 250 ;
Salary ----- Rs. 1,000;
Postage ----- Rs. 80 ;
Sundries ----- Rs. 300;

On Dec., 31, 1999, Bank balance was Rs2,000.

Find out cash balance by preparing Receipts and
Payments Account for the year 1999.

CCP 302.62 8
 Solution :
Receipts and Payments Account for the year ending 31-12-1999
Rs. Rs.
To subscriptions 5,000 By Investments 1,500
By Rent 900
To Donations 2,250
By Printing &
Stationery 250
By Salary 1,000
By Postage 80
By Sundries 300
By Cash in hand 3,220
By Cash at bank 2,000
7,250 7,250
To cash in hand 3220
To cash at bank 2000

CCP 302.62 9
 Assignment
(1) A club as on 31st Dec., 2002 had the following
Receipts and Payments
Receipts : Rs. Rs.
Subscriptions = 3,300 ; Donations = 260 ;

Payments : Rs. Rs.

Investments = 1,000 ; Rent = 400;
General Expenses = 210 ; Postage & stationery = 70;
Sundries = 30.

Prepare Receipts and Payments Account for the year

ending 31st Dec, 2002 and find the closing balance
Ans: 1850

CCP 302.62 10
(2) Prepare Receipts and Payments Account of
Sports Club for the year 1976
Rs.
Cash in hand on 1-1-1976 750
Cash at bank on 1-1-1976 2,300
Investments purchased on 1-7-1975 10,000
Subscriptions for 1976 15,300
Subscriptions for 1976 not received 800
Entrance fees 500
Sale of furniture 600
Action of old bills 300
Subscriptions outstanding on 1-1-1976 (all collected) 400
Interest accrued on Investment 100
Salaries paid 4,000
Salaries unpaid 400

CCP 302.62 11
(Problem contd.-----) Rs.

Expenses for 1976 3,900

Expenses still payable for 1976 300
Prepaid expenses on 31/12/76 150
Expenses outstanding on 1-1-76
paid during 1976 400
Sports Equipment Purchased 600
Depreciation 2,500
Cash in hand 80

CCP 302.62 12
• Prepare Receipts and Payments Account of Madras
Music Academy for the year ended 31st Dec., 1971
Rs.
Receipts : Subscriptions received 4,000
Interest on investments 300

Payments : Stationery 100

Petty expenses 50
Outstanding creditors of last year paid 500
General expenses 300
Music instruments purchased 600
Entertainment expenses 500
Annual day dinner 1,000
Salaries 250
Rent 500
Outstanding amounts on 31st Dec. 1971.
Salaries Rs.50 ; Rent Rs.50 ; Subscriptions Rs.600
Closing balance Ans: Total Rs. 1300
CCP 302.62 13
(4) Prepare Receipts and Payments Account of Rangam
Club for the Year ending 31st Dec. 1972

Receipts : Cash on 1-1-1972 Rs. 600

Subscriptions :
Rs. Rs.
Arrears 24
Current 1,266
Advance 48 1338

Profit from canteen 900

Miscellaneous 45
Sale of old newspapers 112
Dividends 485
CCP 302.62 14
payments : Rs.
Salaries 1,245
Stationery 240
Rent & Taxes 360
Telephone 60
Investments 750
Advertisement 105
Postage 100
Sundries 350
Closing balance 270

Ans: Total Rs.270 CCP 302.62 15

 Summary
In receipts & payment Accounts
 All the incomes (Revenue and capital Receipts ) are
Posted on debit side, Irrespective of the year to
which it belongs
 If the opening Balance is given it will be shown on
debit side at the beginning

CCP 302.62 16
 Summary contd.
 All the expenses ( Revenue and capital expenses )
are posed on credit side, Irrespective of the year to
which it belongs i.e., last year ,current year and next
year
 The balance is closing balance
 If the closing Bank balance is given it is posted on
the credit side of Receipts and payments a/c

CCP 302.62 17
 Quiz

(1)Receipts and Payments Account is similar

to
(a) Cash book

(b) Subsidiary books

(c) Sales ledger

(d) None of the above

CCP 302.62 18
(1)Receipts are entered on Debit side, &
payments are entered on

(a) Credit side

(b) Debit side

(c) Both sides

(d) None of the above

CCP 302.62 19
 Frequently Asked Questions

(1)Prepare Receipts and Payments Account of

Lucky Club for the year ending 31-12-77
Receipts : Rs.

Balance on 1-1-77 745

Subscriptions 6,800
Entrance fees 260
Interest 420
Proceeds from Lectures 2,590

CCP 302.62 20
Payments : Rs.

Upkeep of grounds 4,750

Wages of Grounds men 4,680
Ground, Rent 105
Printing 465
Postage 95
Balance on 31-12-77 720

CCP 302.62 21