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easyMCQCUET Accountancy 2022 20 July Shift 12026Accountancy
1 mark

Income and Expenditure Account is prepared on (a)_________ basis, while Receipts and Payments Account is prepared on (b)_________ basis.

  1. A
    (a) Cash (b) Accrual
  2. B
    (a) Cash (b) Credit
  3. C
    (a) Accrual (b) Cash
  4. 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.

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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

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