The correct answer is: C. All receipts and payments relating to the current year only.
A receipt and payment account is a financial statement that records all cash receipts and payments for a specific period of time. It is used to track the flow of cash into and out of a business, and to identify any potential problems with cash management.
Receipts are recorded in the account when cash is received from customers, suppliers, or other sources. Payments are recorded in the account when cash is paid out for expenses, such as salaries, rent, or utilities.
The receipt and payment account is a very important tool for businesses of all sizes. It can be used to track cash flow, identify potential problems, and make informed decisions about financial management.
Here is a brief explanation of each option:
- A. Revenue receipts and payments only. This option is incorrect because the receipt and payment account records all receipts and payments, not just revenue receipts and payments.
- B. Capital receipts and payments only. This option is incorrect because the receipt and payment account records all receipts and payments, not just capital receipts and payments.
- C. All receipts and payments relating to the current year only. This option is correct because the receipt and payment account records all receipts and payments for a specific period of time, which is usually the current year.
- D. All receipts and payments relating to the current year, succeeding year as well as preceding year. This option is incorrect because the receipt and payment account only records receipts and payments for the current year.