Income and Expenditure Account is prepared on (a)_________ basis, while Receipts and Payments Account is prepared on (b)_________ basis.
- A(a) Cash (b) Accrual
- B(a) Cash (b) Credit
- C(a) Accrual (b) Cash
- D(a) Permanent (b) Temporary
Solution & Step-by-step Explanation
The Income and Expenditure Account follows the matching concept and is prepared on an accrual basis, recording income earned and expenses incurred whether paid/received or not. The Receipts and Payments Account is merely a summary of cash transactions, hence prepared on a cash basis.