Accountancy Part AAccounts for Non Profit Organsiation

Non-Cash transactions will be excluded from :

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Receipt and Payment A/c

The Receipt and Payment Account is a summary of the cash book, so it records only actual cash and bank receipts and payments. Non-cash items such as depreciation, outstanding expenses and accrued income are left out of it.

Why the other options are incorrect

Option (2) Balance Sheet — Incorrect. It shows outstanding and accrued items and assets after depreciation.
Option (3) Profit and loss A/c — Incorrect. It is prepared on the accrual basis and includes depreciation and outstanding expenses.
Option (4) Income and Expenditure A/c — Incorrect. It includes non-cash expenses such as depreciation.

Note: This question is from the pre-rationalised NCERT book. The topic is not there in the latest NCERT book (2026-27), but it is still in the CUET 2026 syllabus, so do not skip it.

NCERT (Pre-rationalised edition):
Salient Features – “… 5. No non-cash items such as depreciation outstanding expenses accrued income, etc. are shown in this account.”

NCERT (Pre-rationalised edition):
Difference between the Receipt and Payment Account and the Income and Expenditure Account – “… Non-cash expenses such as depreciation on fixed assets and outstanding incomes and expenses are shown in the latter but omitted in the former.”