Accountancy Part AAccounts for Non Profit Organsiation

Which of the following is not true for Receipt and Payment Account of…

Which of the following is not true for Receipt and Payment Account of not for profit organisation?

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Receipts and payments recorded must be of current period only

A Receipt and Payment Account records all cash and bank receipts and payments of the year irrespective of the period to which they relate — past, current or future. So statement (3) is not true.

Option (1) It is a summary of cash book — A true statement. It is a classified summary of the cash book.

Option (2) It records receipt and payment of revenue as well as of capital nature — A true statement. It includes both capital and revenue receipts and payments.

Option (4) This account does not include depreciation — A true statement. Depreciation is a non-cash item, so it never appears in this account.

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 – “1. It is a summary of the cash book. … 2. It shows the total amounts of all receipts and payments irrespective of the period to which they pertain . … 3. It includes all receipts and payments whether they are of capital nature or of revenue nature. … 5. No non-cash items such as depreciation outstanding expenses accrued income, etc. are shown in this account.”