Explain the statement: “Receipt and Payment Account is a summarised version of Cash Book”.

Explanation

It is ready at the tip of the accounting year on the idea money of money receipts and money payments recorded within the cash book. It merely may be a outline of money and bank transactions below varied heads. Receipt and Payment Account offers summarised image of assorted receipts and payments, no matter whether or not they pertain to this amount, previous amount or succeeding amount or whether or not they area unit of capital or revenue nature. it should be noted that this account doesn't show any non-item like depreciation.

The gap balance in Receipt and Payment Account represents take advantage hand/ money at bank that is shown on its receipts facet, and therefore the closing balance of this account represents take advantage hand and bank balance as at the tip of the year, that seem on the accounting system of the Receipt and Payment Account.