The income and expenditure account of a club is the same as
Answer Details
The income and expenditure account of a club is the same as a profit and loss account.
A profit and loss account is a financial statement that shows a company's revenues, expenses, gains, and losses over a specific period, usually a year. The purpose of the profit and loss account is to determine whether the business has made a profit or a loss during the accounting period.
Similarly, the income and expenditure account of a club is a financial statement that shows the club's income and expenses over a specific period. It is used to determine whether the club has a surplus or a deficit during that period.
The income and expenditure account is prepared on the basis of the accrual accounting system, where income is recognized when earned, and expenses are recognized when incurred, regardless of when the cash is received or paid.
In contrast, a cash book is a financial record of cash transactions of the club, including receipts and payments. It does not show the overall financial performance of the club over a specific period, as does the income and expenditure account.
Therefore, the income and expenditure account of a club is the same as a profit and loss account, as they both serve the same purpose of determining the financial performance of an organization over a specific period.