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Limitations of recept and payment account

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Limitations of recept and payment account

Posted by Lesh Patle 3 years, 11 months ago

CBSE > Class 12 > Accountancy

1 answers

Gaurav Seth 3 years, 11 months ago

It does not differentiate capital and revenue expenses and incomes. This is because it shows transactions of both natures together at the same place without any showcase of difference.
It fails to show the transactions on an accrual basis.
It does not define any targets making it incapable of showing surpluses and deficits at the end of the year.
Receipts and payments account does not show Non-Cash transactions like depreciation of assets, pilferage etc.

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