What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?

Explanation

The following steps square measure taken for making ready financial gain and expenditure account from a receipts and payments account:



1. Exclude the gap and shutting money and bank
balance.

2. Exclude all capital payments and receipts as these square measure shown on the record.

3. Exclude any financial gain received for the previous amount and any payment received before.

4. Similarly exclude the expenditures for the previous amount and therefore the returning amount.

5. Include all the incomes that square measure associated with the present amount however that square measure nonetheless to be received.

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