Receipts and Payments under cash and mercantile systems
This query is : Resolved
25 May 2022
Receipts and payment statement is prepared to denote the ACTUAL movement of cash during a period. Do the components of this statement change with the method of accounting system followed?
Ex: In mercantile system the heads of payments could be sundry payables and receipts could be sundry debtors or Grants received in Advance.
Do the heads of such accounts need to be modified to Telephone expenses (pertaining to sundry payables) and Govt. grant (pertaining to grant received in Advance) in case of cash system?
Ex: In mercantile system the heads of payments could be sundry payables and receipts could be sundry debtors or Grants received in Advance.
Do the heads of such accounts need to be modified to Telephone expenses (pertaining to sundry payables) and Govt. grant (pertaining to grant received in Advance) in case of cash system?
CA R SEETHARAMAN
(Expert)
26 May 2022
Receipts and payments statement is prepared based on cash receipts and payments.
It can't be prepared on mercantile system.
It can't be prepared on mercantile system.
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