Earlyface

*JAN/FEBRUARY PRIVATE
   *FINANCIAL ACCOUNTING*

Q1 (a) Accrual concept:this concept says that the income to be recognised in any accounting period is the income earned,and not income recieved and  that for the same period the expenses to be recognised the expenses incurred and not expenses paid



(b) consistency: In accounting,there could be more than one way or alternative in solving a specific problem.The accountant is at all af liberty to choose any alternative


2 (c) Going concern concept: The assumption here is that a business organisation will operate in perpetuity


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*2(A)*SOURCES OF INCOME AND EXPENDITURES*

(I) Entrance fees

(ii) Donations

(iii) profit from bar

(iv)Disposal of assets

(v)profit from special events

(vi)subscribtion


   

*(2B) DIFFERENCE BETWEEN A RECEIPTS AND PAYMENT AND INCOME AND EXPENDITURE ACCOUNT*

1) Receipts and payment account is a real accounts while income and expenditure account is a nominal account

(2) Receipt and payment account record both capital and revenue expenditure while income and expenditure account record only revenue expenditure items.

(3) Receipts and payment account is a summarised cash book while income and expenditure is a profit and loss account

(4) Receipt and payment account is prepared and cash basis while income and expenditure is.prepare in accrual basis.

(5) Receipt and payment start with an opening balance which may be cash in hand or bank or an overdraft while income and expenditure is an open balance.