(7) Balance at the end The balance at the end of Receipts and payments Account show the cash in hand or cash over spent but in Income and Expenditure Account the balance at the end shows excess income over expenditure or vice versa (8) Outstanding Items --Receipts and Payment Account does not show the income received in advance or outstanding, whereas in the income and expenditure Account, all the incomes and expenditures of the current year are taken into account (9) Balance Sheet-With Receipts and Payments Account Balance Sheet is not prepared whereas with income and expenditure Account, preparation of the balance sheet is a must. (10) Receipt-Receipts and payments account is the Summary of Cash Book, so it is not necessarily a part of the Double Entry System, but Income and Expenditure Account is neccessarily a part of the Double Entry System. Steps to Prapare Income and Expenditure Account from Receipts and Payments Account- (a) Ignore the opening and closing cash and bank balance. (b) Ignore capital expenditure and capital receipts. For example, if cash has been realised by sale x35 of investments, the amount will not be credited to Income and Expenditure Account. The amount will be deducted from investments for balance sheet purpose. Of course, if some profit or loss has emerged from the sale of investments, it will be shown in the Income and Expenditure Account. If investments costing Rs 5,000 are sold for Rs. 5,400, Rs. 5,000 will be deducted from investments and Rs. 400 will be credited to Income and Expenditure Account. Similarly, if money has been spent to acquire an asset, say, furniture, the amount will be shown in the balance sheet and not debited to the Income and Expenditure Account (c) Revenue receipts or current incomes will be found on the receipts side of the Receipts and Payments Account. These will be credited to the income and Expenditure Account subject to the following: () Current income relating only to the year concerned will be credited to Income and Expenditure Alc. For example, if in 2000 subscriptions have also been received for 1999 and 2001 these amounts should not be credited to the Income and Expenditure A/c. The amount for 1999 will extinguish a debt owing to the institution and one for 2001 will be "Subscriptions Received in advance" and will be shown as a liability in the balance sheet. The amount will be treated as income in 2001 () The amount which is due but not yet received in cash should be brought into account. The amount is added to the income and treated as an asset, cash for which will be received next year. Illustration 1. In 2000 the amount actually received for subscriptions was Rs.16,800 From the following further informations show what amount should be credited to the Income and Expenditure Account as Subscriptions, Subscriptions Outstanding (for due) on 31st Dec., 1999 1500 1,500 Subscriptions Outstanding (for due) on 31st Dec., 2000 1.700 Subscription Received in Advance as on 31st Dec., 2000. Subscriptions for 2001 received in 2000 500 Rs 600