Which of the following options given below are correct?
A. A balancing figure on credit side of Income and Expenditure Account denotes excess of expenses over incomes.
B. Surplus of Income and Expenditure Account is deducted from the Capital/General Fund.
C. Receipts and Payments Account is equivalent to Profit and Loss Account.
D. Receipts and Payments Account records the receipts and payments of revenue nature only.
E. Receipts and Payments Account does not differentiate between capital and revenue receipts.
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → A, E only
A. A balancing figure on credit side of Income and Expenditure Account denotes excess of expenses over incomes. Correct. A balance on the credit side means the debits (expenses) are larger: it is a deficit.
B. Surplus of Income and Expenditure Account is deducted from the Capital/General Fund. Incorrect. A surplus is added to the capital fund; a deficit is deducted.
C. Receipts and Payments Account is equivalent to Profit and Loss Account. Incorrect. It is a summary of the cash book; the Income and Expenditure Account is the one akin to the Profit and Loss Account.
D. Receipts and Payments Account records the receipts and payments of revenue nature only. Incorrect. It records all cash receipts and payments, capital and revenue alike.
E. Receipts and Payments Account does not differentiate between capital and revenue receipts. Correct. It records every receipt in cash, whatever its nature.
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):
NCERT (Pre-rationalised edition):
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