An income and expenditure account is a record showing debits and credits for an organization within a particular time period. Income and expenditure accounts are also referred to as profit and loss accounts. Generally, these accounts are credited with debits and credits, whether paid or not. As a rule, transactions of a capital nature, such as payments for vehicles or sales of machinery, as well as donations from a will, should not be included in this account.Continue Reading
The difference between income and expenditure, whether surplus or deficiency, is transferred to a capital account. A capital account is record of money available for the daily operations of an organization. Income and expenditure accounts are popular with nonprofit organizations, such as clubs, hospitals, schools and charities. Donations, member subscriptions and entrance fees are among the items that appear on the income side of profit and loss accounts.
Items appearing on the expenditure side of the record include salaries, honorariums, rents, utility bills and car expenses. Data for generating an income and expenditure account comes from a receipt and payment account or from a trial balance. A trial balance is a record that shows the ending balance of a particular account at the close of a particular period.Learn more about Accounting
Tips for learning basic accounting principles involve understanding the basic fundamental equation, recording transactions, entering debits and credits properly, and preparing journal entries, notes Basic Accounting Help. Accounting is the process of identifying, measuring and communicating economic information to permit informed judgements and decisions, states Business News Daily.Full Answer >
A general ledger is a type of accounting document that includes all of the financial records for a company, often consisting of additional documents to track credits and debits on individual accounts as well as monitor available equity and inventory. The document may appear in a physical book, in a series of custom spreadsheets, or as pages within a digital record-keeping program.Full Answer >
A post-closing trial balance includes information such as account names, debits, credits, assets, liabilities and equities. It is virtually the same as all the other trial balances in the accounting cycle.Full Answer >
The ledger balance in a checking account is the balance of the account once the total number of debits are subtracted from the total number of credits within a given account period, as Investopedia explains. The ledger balance includes all checks or transactions that have not yet cleared, says Trustmark.Full Answer >