Receipts & Payments Account (Cambridge International A-Level Accounting)

Receipts & payments accounts

Spec point — how to prepare, from full or incomplete accounting records: – a receipts and payments account

Receipts & payments accounts

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

Layout of a receipts and payments account

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 sid

• 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

Final answer: The Old Mill Golfing Club Final answer: Receipts and Payments Account for year ended 31 May 2024
Final answer: Date	Final answer: Details	Final answer: $**	Final answer: Date	Final answer: Details	Final answer: $
Final answer: 2023 Final answer: June 1	Final answer:** Balance b/d **	Final answer: 4 120	Final answer: 2024 Final answer: May 31	Final answer: Shop purchases	Final answer: 4 980
Final answer: 2024 Final answer: May 31	Final answer:** Subscriptions **	Final answer: 66 400	Final answer: May 31	Final answer:** Wages **	Final answer: 44 700
Final answer: May 31	Final answer: Shop sales	Final answer: 8 350	Final answer: May 31	Final answer: General expenses	Final answer: 5 100
Final answer: May 31	Final answer: Rental income	Final answer: 5 200	Final answer: May 31	Final answer: Golf carts purchase	Final answer: 14 400
		Final answer:** **	Final answer:** May 31	Final answer: Balance c/d	Final answer: 14 890
		Final answer: 84 070			Final answer: 84 070
Final answer: 2024 Final answer: June 1	Final answer: Balance b/d	Final answer: 14 890