Income and Expenditure account prepared by the Not-for-Profit Organisation at the end of a period reveals:

Excess of income over expenditure or expenditure over income

The correct answer is option 1- Excess of income over expenditure or expenditure over income.

Income and Expenditure account prepared by the Not-for-Profit Organisation at the end of a period reveals Excess of income over expenditure or expenditure over income.

The Income and Expenditure Account serves the same purpose as the profit and loss account of a business organisation does. All the revenue items relating to the current period are shown in this account, the expenses and losses on the expenditure side and incomes and gains on the income side of the account. It shows the net operating result in the form of surplus (i.e. excess of income over expenditure) or deficit (i.e. excess of expenditure over income), which is transferred to the capital fund shown in the balance sheet. 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. Hence, many items appearing in the Receipts and Payments need to be adjusted.