Accountancy Part AAccounts for Non Profit Organsiation

If the credit side of Receipt and Payment A/c is more than the debit…

If the credit side of Receipt and Payment A/c is more than the debit side then the difference will be shown as :

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Bank overdraft

The Receipt and Payment Account is a summary of the cash book. If payments (credit side) are more than receipts (debit side), the organisation has paid out more than it had, which is possible only through the bank, so the closing balance is a bank overdraft, shown on the debit side as the last item.

Why the other options are incorrect

Option (2) Commission — Incorrect. Commission is an ordinary receipt or payment item, not a balance.
Option (3) Bank charges — Incorrect. Bank charges are a payment shown on the credit side.
Option (4) Interest — Incorrect. Interest received or paid is an item of the account, not its closing balance.

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):
Receipt and Payment Account – “… The opening balance in Receipt and Payment Account represents cash in hand/cash at bank which is shown on its receipts side and the closing balance of this account represents cash in hand and bank balance as at the end of the year, which appear on the credit side of the Receipt and Payment Account. However, if it is bank overdraft at the end it shall be shown on its debit side as the last item.”