Which of the following step is incorrect at the time of preparing a income and expenditure account?

Exclude the capital receipts and capital payments as these are to be shown in the Balance Sheet. Include the opening and closing balances of cash and bank as they are not an income. Pursue the Receipt and Payment Account thoroughly. Consider only the revenue receipts to be shown on the income side of Income and Expenditure Account.

Include the opening and closing balances of cash and bank as they are not an income.

The following steps are used in preparing an Income and Expenditure Account 1. Persue the Receipt and Payment Account thoroughly. 2. Exclude the opening and closing balances of cash and bank as they are not an income. 3. Exclude the capital receipts and capital payments as these are to be shown in the Balance Sheet. 4. Consider only the revenue receipts to be shown on the income side of Income and Expenditure Account. Some of these need to be adjusted by excluding the amounts relating to the preceding and the succeeding periods and including the amounts relating to the current year not yet received. 5. Take the revenue expenses to the expenditure side of the Income and Expenditure Account with due adjustments as per the additional information provided relating to the amounts received in advance and those not yet received. 6. Consider the following items not appearing in the Receipt and Payment Account that need to be taken into account for determining the surplus/ deficit for the current year : (a) Depreciation of fixed assets. (b) Provision for doubtful debts, if required. (c) Profit or loss on sale of fixed assets.