The income and expenditure account differs from receipts and payments account because it
-
A.
accounts for notional charges -
B.
records transactions that relate to the period on cash basis -
C.
records transactions that relate to the period on accrual basis -
D.
accounts for balance of cash at bank
Correct Answer: Option B
Explanation
Receipts and payments account is a summary of cash transactions for a period and it is a real account. Income and expenditure account is a summary of expenditure and income like trading and profit and loss account and it is a nominal account.