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Why depreciation of fixed assets are …

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Why depreciation of fixed assets are not recorded in the receipt and payments a/c???

Posted by Aisha Singh 7 years ago

CBSE > Class 12 > Accountancy

3 answers

Aastha Garg 6 years, 11 months ago

bcoz dep is a non-cash expense

Abhay Pandey 6 years, 11 months ago

Because it is a summary of cash book and depreciation does not lead to inflow or outflow of cash

Gaurav Seth 7 years ago

Receipts and Payments Account is a real account which is prepared following the cash basis of accounting. That is, it recognises revenue and expenses at the time of actual receipt or payment in cash. This account records Cash receipts on the debit side and cash payments on the credit side.

Depreciation being a non-cash expenses is not accounted in Receipts and Payments Account.

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