Assertion (A): The income and expenditure account is prepared on the accrual basis of accounting.
Reason (R): The transactions related to the current year are added and those related to the previous or following year are to be subtracted while preparing Income and Expenditure account.

Both Assertion(A) and Reason (R) is the correct explanation of Assertion (A)

Yes, income and expenditure account is prepared on the accrual basis of accounting. In the accounting, only current year income and expenditures are recorded after subtracting previous and following year items and current year outstanding items are added.