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Receipts and Payments Account, ISC Class 11 Accounts

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AccountsISC Class 11 · Accounting for Not-for-profit Organisations

Receipts and Payments Account of a Not-for-profit Organisation: ISC Class 11 Accounts

Updated 17 October 2026 · Fact-checked

A not-for-profit organisation (club, school society, charity) works for service, not profit, and keeps no trading account. Its basic statement is the Receipts and Payments Account, a summary of the cash book: all cash receipts on the debit side and all payments on the credit side, capital and revenue both, with opening and closing cash and bank balances. It is a real account.

Notice that it is a cash summary: opening balance on the debit side, closing on the credit side, capital and revenue items both included, with no surplus shown.

Illustration drawn for QuestionBuddy.

Understand Not-for-profit Organisations: Features and Receipts and Payments Account

Features of a not-for-profit organisation. Aim is service to members or society; funds come from subscriptions, donations, grants and fees; the surplus is not distributed; accounts are kept on the same principles but a Receipts and Payments Account and an Income and Expenditure Account are made. Instead of capital there is a Capital (General) Fund.

Receipts and Payments Account.

  • A summary of the cash book; real account.
  • Opening balance of cash and bank on the debit side; closing balance on the credit side.
  • Records only cash actually received or paid: no outstanding or prepaid adjustments, no non-cash items (depreciation, provisions).
  • Includes both capital and revenue items of the period.
  • Receipts are not adjusted to the period they belong to; subscriptions of other years are included if received in this year.
  • Sale of old assets and fixed deposits' interest received are shown under receipts as cash comes.

Capital receipts. Entrance fees (when capitalised), life membership fees, special donations for a building, legacies and endowment funds are capital receipts. They are added to the Capital Fund, and these appear in the Receipts and Payments Account but not in the Income and Expenditure Account. General donations and ordinary subscriptions are revenue.

Limitations. It does not show surplus or deficit; it does not show liabilities or assets; items of the previous and next year are mixed with the current year. These gaps are covered by the Income and Expenditure Account and the Balance Sheet.

Preparation. Take opening cash and bank, list every receipt and payment from the cash information, total both sides, and the balancing figure gives the closing cash.

Not-for-profit Organisations: Features and Receipts and Payments Account: key facts

Closing cash
Closing cash = Opening cash + Receipts - Payments | Receipts include capital items
Balancing figure of the account.
Structure
Debit: opening balances and receipts | Credit: payments and closing balances
Cash book summary.
Capital items
Capital receipts: life membership, special donations, legacies | Added to the Capital Fund
Not income.

How to answer Not-for-profit Organisations: Features and Receipts and Payments Account questions

Treat the account like a summary of the cash book.

  1. 1Write opening cash and bank on the debit side.
  2. 2List cash receipts (subscriptions, donations, sale of asset) under receipts.
  3. 3List cash payments (salary, purchase of asset) on the credit side.
  4. 4Total both sides; the difference is the closing balance, shown on the credit side.

Not-for-profit Organisations: Features and Receipts and Payments Account in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Cash only

Suppose a residents' club collected Rs 4,000 of subscriptions that were due for last year and paid a Rs 3,000 electricity bill for the last month of last year.

Do both items appear in this year's Receipts and Payments Account?

Try it first, then show the solutionSolution
  1. The account records cash actually received and paid in the period regardless of the year it relates to.
  2. So both Rs 4,000 and Rs 3,000 appear.

Answer: Yes, both items appear.

Memory hook: Cash in, cash out, no adjusting.

Tricks to remember Not-for-profit Organisations: Features and Receipts and Payments Account

Short memory aids. Say each one aloud once, then use it on a question the same day.

  • R&P = cash book summary

    Receipts left, Payments right, closing cash on the right.

    Use it when: Format.

  • No non-cash

    Depreciation and outstanding items never appear in it.

    Use it when: Items excluded.

  • Capital goes to the fund

    Life membership, legacies and special donations are capital.

    Use it when: Treatment.

Not-for-profit Organisations: Features and Receipts and Payments Account: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Nature of the account · 1 mark · MCQBoard level

The closing balance of cash and bank in a Receipts and Payments Account appears:
(a) on the debit side (b) on the credit side (c) in the Income and Expenditure Account (d) in the Capital Fund

Try it first, then show the solutionSolution
  1. The debit side lists opening balance and receipts; the balancing figure goes on the credit side.

Answer: (b) on the credit side

Example 2: Features · 4 marks · Short answerBoard level

State four features of the Receipts and Payments Account. (4 marks)

Try it first, then show the solutionSolution
  1. Summary of the cash book.
  2. Records only cash transactions.
  3. Shows both capital and revenue items.
  4. Begins with opening balance and ends with closing balance.

Answer: Summary of the cash book; cash basis only; capital and revenue both included; opening and closing balances shown.

Example 3: Prepare the account · 7 marks · Long answerHarder board level

A club had cash Rs 8,000 and bank Rs 22,000 on 1 April. During the year it received subscriptions Rs 60,000 (of which Rs 5,000 related to last year), entrance fees Rs 6,000, donation for a building Rs 40,000, sale of old furniture Rs 3,000 and interest Rs 4,000. It paid salaries Rs 36,000, rent Rs 12,000, newspapers Rs 7,000, bought furniture Rs 18,000 and sports equipment Rs 14,000. Prepare the account, finding closing cash and bank (cash and bank combined). (7 marks)

Try it first, then show the solutionSolution
  1. Receipts = opening 30,000 + 60,000 + 6,000 + 40,000 + 3,000 + 4,000 = Rs 1,43,000.
  2. Payments = 36,000 + 12,000 + 7,000 + 18,000 + 14,000 = Rs 87,000.
  3. Closing balance = 1,43,000 - 87,000 = Rs 56,000.
  4. Subscription of last year is included as cash was received.

Answer:

ReceiptsRsPaymentsRs
To Balance b/d (cash and bank)30,000By Salaries36,000
To Subscriptions60,000By Rent12,000
To Entrance fees6,000By Newspapers7,000
To Donation for building40,000By Furniture18,000
To Sale of old furniture3,000By Sports equipment14,000
To Interest4,000By Balance c/d56,000
Total1,43,000Total1,43,000

Example 4: Find the opening balance · 4 marks · Short answerHarder board level

The Receipts and Payments Account of a society for the year shows total receipts (excluding opening balance) of Rs 2,10,000 and payments of Rs 1,95,000. The closing balance is Rs 48,000. Find the opening balance. If Rs 30,000 of the receipts were a legacy, how much of the receipts are revenue? (4 marks)

Try it first, then show the solutionSolution
  1. Opening + 2,10,000 = 1,95,000 + 48,000, so opening = 2,43,000 - 2,10,000 = Rs 33,000.
  2. A legacy is capital; revenue receipts = 2,10,000 - 30,000 = Rs 1,80,000 (if the rest are revenue).

Answer: Opening balance Rs 33,000; revenue receipts Rs 1,80,000.

Example 5: Why not use it to measure surplus? · 4 marks · Short answerHOTS / competency

A treasurer says: "The R&P account shows a closing cash of Rs 56,000, higher than opening cash of Rs 30,000, so the club earned a surplus of Rs 26,000." Evaluate with the data of the previous question. (4 marks)

Try it first, then show the solutionSolution
  1. Cash rose by 26,000 including capital receipts (donation 40,000, entrance fees 6,000 if capital, sale of furniture 3,000) and purchases of assets (18,000 + 14,000).
  2. Last year's subscription 5,000 is also counted.
  3. So the rise is not the surplus; the I&E account is needed.

Answer: Cash change mixes capital items and other-year items, so it is not the surplus.

Where students lose marks in Not-for-profit Organisations: Features and Receipts and Payments Account

The slips examiners see most often, and what to write instead.

  • Mistake: Adding outstanding subscription in R&P

    Using accrual.

    Wrong working

    Subscriptions 66,000 including outstanding

    Right working

    Subscriptions 60,000 (cash only)

    Do this: Only cash items.

    Usually costs: 2 marks.

  • Mistake: Showing depreciation in R&P

    Mixing accounts.

    Wrong working

    By Depreciation 4,000

    Right working

    Not shown

    Do this: Non-cash items do not belong.

    Usually costs: 1 mark.

  • Mistake: Closing balance on the debit side

    Habit from ledger.

    Wrong working

    To Balance c/d on debit

    Right working

    By Balance c/d on credit

    Do this: Closing cash is the balancing figure of the credit side.

    Usually costs: 1 mark.

Exam tips

  • Show the opening and closing balance of cash and bank separately if given.
  • Tick purchase of assets under payments, not as expenses.
  • Say "cash basis" explicitly in theory answers.

Practice questions on Not-for-profit Organisations: Features and Receipts and Payments Account

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

  1. Q1 · 1 mark · MCQBoard level

    Which of the following is NOT recorded in the Receipts and Payments Account?
    (a) Subscriptions received (b) Salaries paid (c) Depreciation (d) Sale of old furniture

    Hint

    Non-cash.

    Answer

    (c) Depreciation

  2. Q2 · 3 marks · Short answerBoard level

    Distinguish between Receipts and Payments Account and Income and Expenditure Account on any three points. (3 marks)

    Hint

    Basis, items, result.

    Answer

    R&P: real account, cash basis, includes capital items, starts with opening balance; I&E: nominal account, accrual basis, only revenue items, shows surplus or deficit.

  3. Q3 · 6 marks · Long answerHarder board level

    Opening cash Rs 5,000 and bank Rs 15,000. Receipts: subscriptions Rs 90,000, donations (general) Rs 12,000, life membership Rs 25,000, interest Rs 3,000. Payments: honorarium Rs 24,000, repairs Rs 9,000, electricity Rs 11,000, books bought Rs 30,000. Prepare the account and find closing balance. (6 marks)

    Hint

    Receipts 1,50,000 with opening.

    Answer

    Receipts total 20,000 + 90,000 + 12,000 + 25,000 + 3,000 = 1,50,000. Payments 24,000 + 9,000 + 11,000 + 30,000 = 74,000. Closing balance Rs 76,000.

  4. Q4 · 4 marks · Short answerHarder board level

    From the cash summary: payments Rs 1,20,000, closing balance Rs 40,000, opening balance Rs 25,000 and the receipts side includes subscriptions Rs 95,000 and one other item. Find that other item. If it is sale of an old computer, how will it be treated? (4 marks)

    Hint

    Receipts total = 1,60,000.

    Answer

    Receipts including opening = 1,60,000; other item = 1,60,000 - 25,000 - 95,000 = Rs 40,000. Sale of an asset is a capital receipt, taken to reduce the asset in the balance sheet, not income.

  5. Q5 · 3 marks · Short answerHOTS / competency

    A club's treasurer enters the purchase of a Rs 50,000 projector as an expense in the Receipts and Payments Account and calculates the surplus from it. Comment, giving the correct treatment. (3 marks)

    Hint

    Capital expenditure.

    Answer

    The projector is capital expenditure; it appears on the payments side but is an asset in the balance sheet, not an expense. A surplus drawn from the R&P account is unreliable anyway.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

  1. 1.R&P account is a summary of?Show answer

    The cash book.

  2. 2.Which side shows closing cash?Show answer

    Credit.

  3. 3.Are capital receipts in R&P?Show answer

    Yes.

  4. 4.Does R&P show surplus?Show answer

    No.

  5. 5.Basis used?Show answer

    Cash basis.

Not-for-profit Organisations: Features and Receipts and Payments Account: frequently asked questions

Is entrance fee always capital?

It is treated as capital if the rules say so; otherwise it is revenue.

Do not-for-profit bodies have capital?

They have a Capital Fund.

Is R&P like a trading account?

No.

Does it include previous year's receipts?

Yes, if received in cash this year.