Receipts & Payments Account (Cambridge (CIE) IGCSE Accounting)
Revision Note
Written by: Donna Simpson
Reviewed by: Dan Finlay
Receipts & Payments Account
What is a receipts and payments account?
A receipts and payments account is a simple cash book
They are prepared each year by clubs and societies
Clubs and societies use the account to record receipts and payments
Amounts are not separated into cash or bank transactions
They are summarised as money in and money out
What is the layout of a receipts and payments account?
A receipts and payments account is prepared in a similar way to a cash book
Amounts received are debited
Amounts paid are credited
Receipts might include:
Subscriptions from members
Sales revenue from trading activities of the club
Such as selling refreshments
Payments might include:
Expenses for utilities
Purchase of inventory for the trading activities
Worked Example
The Old Mill Golfing club offers lessons to amateur golfers and it also provides a place for experienced golfers to play regularly. It also has a shop where golfing equipment can be bought.
The club had $4 120 in the bank on 1 June 2023. The club provided the following list of receipts and payments for the year ended 31 May 2024.
$ | |
Subscriptions received | 66 400 |
Revenue for shop sales | 8 350 |
Purchases of golfing equipment for resale | 4 980 |
Wages | 44 700 |
General expenses | 5 100 |
Purchase of golf carts for the club | 14 400 |
Income from the rental of golf carts | 5 200 |
Prepare the receipts and payments account for The Old Mill Golfing club for the year ended 31 May 2024. Balance the account and bring down the balance at 1 June 2024.
Answer
The bank balance on 1 June 2023 is the opening balance and goes on the debit side.
Label each item as:
A debit if the club received money
A credit if the club paid money
$ | ||
Subscriptions received | 66 400 | Debit |
Revenue for shop sales | 8 350 | Debit |
Purchases of golfing equipment for resale | 4 980 | Credit |
Wages | 44 700 | Credit |
General expenses | 5 100 | Credit |
Purchase of golf carts for the club | 14 400 | Credit |
Income from the rental of golf carts | 5 200 | Debit |
Enter the entries into the receipts and payments account. And then balance the account and bring down the balance.
The Old Mill Golfing Club Receipts and Payments Account for year ended 31 May 2024 | |||||
Date | Details | $ | Date | Details | $ |
2023 June 1 |
Balance b/d |
4 120 | 2024 May 31 |
Shop purchases |
4 980 |
2024 May 31 |
Subscriptions |
66 400 | May 31 | Wages | 44 700 |
May 31 | Shop sales | 8 350 | May 31 | General expenses | 5 100 |
May 31 | Rental income | 5 200 | May 31 | Golf carts purchase | 14 400 |
| May 31 | Balance c/d | 14 890 | ||
84 070 | 84 070 | ||||
2024 June 1 |
Balance b/d |
14 890 | |||
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