The features of receipts and payment account includes?

Given:

I. It records subscription in arrears
II. Payments of liabilities is effected
III. The account does not show if cash payment is revenue or capital expenditure
IV. It performs the same function as cashbook

A. I, II and IV
B. II, III and IV
C. III and IV
D. I, II and III

Correct Answer:

Option B – II, III and IV

Explanation

The receipts and payment account is one of the accounts of a non-profit oriented organization that performs the same functions as the cash account in a profit-oriented organization.
All forms of payment since cash is involved will be recorded and also performs the same functions as the cashbook does for profit-oriented organization