Accountancy Part AAccounts for Non Profit Organsiation

Income and Expenditure Account is prepared on (a)__________ basis, wh…

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

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → (a) Accrual (b) Cash

Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), and it is also out of the CUET 2026 syllabus.

NCERT (Pre-rationalised edition):
Income and Expenditure Account – “… The Income and Expenditure Account is prepared on accrual basis with the help of Receipts and Payments Account along with additional information regarding outstanding and prepaid expenses and depreciation etc.”

Receipt and Payment Account – “It is prepared at the end of the accounting year on the basis of cash receipts and cash payments recorded in the cash book. It is a summary of cash and bank transactions under various heads.”