Steps in sequence in the preparation of Receipt and Payment Account will be:

(A) Find out the difference between the total of debit side and the total of credit side
(B) Show the total amounts of all receipts on debit side
(C) Take the opening balance of cash in hand and bank and enter on the debit side
(D) Show the total amounts of all payments on credit side

Choose the correct answer from the options given below:

(C), (B), (D), (A)

The correct answer is Option (4) → (C), (B), (D), (A).

Steps in the Preparation of Receipt and Payment Account

(C) Take the opening balance of cash in hand and bank and enter on the debit side - Take the opening balances of cash in hand and cash at bank and enter them on the debit side. In case there is bank overdraft at the beginning of the year, enter the same on the credit side of this account.

(B) Show the total amounts of all receipts on debit side- Show the total amounts of all receipts on its debit side irrespective of their nature (whether capital or revenue) and whether they pertain to past, current and future periods.

(D) Show the total amounts of all payments on credit side - Show the total amounts of all payments on its credit side irrespective of their nature (whether capital or revenue) and whether they pertain to past, current and future periods.

(A) Find out the difference between the total of debit side and the total of credit side-  Find out the difference between the total of debit side and the total of credit side of the account and enter the same on the credit side as the closing balance of cash/bank. In case, however, the total of the credit side is more than that of the total of the debit side, show the difference on the debit as bank overdraft and close the account.