What is the meaning of income and expenditure?

Income is the revenue generated by a non-trading institution in a financial year, while expenditure denotes outgoing expenses incurred. These are the basis of an Income & Expenditure account, and their net balance calculated after a financial year-end indicates if there is surplus or deficit.

Which side balance in income and expenditure account reveals?

Credit side balance in the Income & Expenditure Account reveals (C) Excess of expenditure over income.

What are the features of income & expenditure account?

Features of Income and Expenditure Account Expenses are entered on the debit side and incomes on the credit side. Any income of revenue relating to the present period (whether actually received or not) and any expenditure of revenue nature (whether paid or not) is included. Capital items are excluded.

Which of the following is a feature of income and expenditure account?

Opening balance is not require to prepare income and expenditure account. Income and expenditure account is maintained on accrual basis. Income and expenditure account is prepared on the basis of receipt and payment account at the end of the accounting year.

Which items are recorded in income and expenditure account?

Income and Expenditure Account is prepared on an accrual basis. All incomes and expenses relating to the accounting year, whether they are actually received and paid or not, are taken into consideration. Expenditure is recorded on the debit side and income is recorded on the credit side.

Which items are shown in income and expenditure account?

In this account, incomes are shown on the credit side and expenses are shown on the debit side.

What is income and expenditure account explain the steps required in its preparation?

What are the features of income and expenditure account?

Features Of Income And Expenditure Account

  • No Opening Balance. Opening balance is not require to prepare income and expenditure account.
  • Accrual Basis.
  • Based On Receipt And Payment Account.
  • Non-cash Items.
  • Debit And Credit Rule.
  • No Capital Transactions.
  • Only Current Year’s Transactions.

Why income and expenditure account is prepared?

Solution. Income and Expenditure Account is prepared to ascertain, whether the concern has sufficient incomes to meet its expenses, or not.

What is income and expenditure account answer in one sentence?

Q. 1 What is an Income and Expense Account? Income and Expenditure Account is a detailed summary of every income earned and every expense incurred by an organization in a particular financial period.

Why income & expenditure account is prepared?

Income and Expenditure Account is prepared to ascertain, whether the concern has sufficient incomes to meet its expenses, or not.

Which of the following is shown in the income and expenditure account?

Out of all only profit and loss are of capital nature and hence have to be recorded in income & expenditure account.