The credit balance in the Income and Expenditure A/c indicates:

The correct answer is: B. the excess of income over expenditure.

An income and expenditure account is a financial statement that shows the income and expenditure of an organization for a specific period of time. The income and expenditure account is prepared by comparing the income and expenditure for the period, and the difference between the two is called the surplus or deficit.

If the income is more than the expenditure, the surplus is shown as a credit balance in the income and expenditure account. If the expenditure is more than the income, the deficit is shown as a debit balance in the income and expenditure account.

The following are the explanations of each option:

• Option A: The excess of cash receipts over cash payments. This is not the correct answer because the income and expenditure account does not show cash receipts and cash payments. It shows income and expenditure.
• Option B: The excess of income over expenditure. This is the correct answer because the income and expenditure account shows the income and expenditure for a specific period of time. The difference between the two is called the surplus or deficit. If the income is more than the expenditure, the surplus is shown as a credit balance in the income and expenditure account.
• Option C: The excess of expenditure over income. This is not the correct answer because the income and expenditure account does not show expenditure over income. It shows income and expenditure.
• Option D: The excess of cash payments over cash receipts. This is not the correct answer because the income and expenditure account does not show cash receipts and cash payments. It shows income and expenditure.