Which one of the following statement is correct?

The correct answer is: A. Subscription received in advance is not shown in Receipts and Payments account.

A receipts and payments account is a financial statement that shows the income and expenses of an organization for a specific period of time. It is prepared on a cash basis, which means that it only records transactions that have been paid in cash. Subscriptions received in advance are not considered to be income until they have been earned, so they are not shown in a receipts and payments account.

Here is a brief explanation of each option:

• Option A: Subscription received in advance is not shown in Receipts and Payments account. This is correct because subscriptions received in advance are not considered to be income until they have been earned.
• Option B: Expenses and incomes on accrual basis are not shown in Receipts and Payments account. This is incorrect because expenses and incomes on accrual basis are shown in a receipts and payments account.
• Option C: Capital receipts and capital expenditures are recorded in Income and Expenditure account. This is incorrect because capital receipts and capital expenditures are recorded in a balance sheet.
• Option D: It is essential that balance sheet should accompany receipts and payments account. This is incorrect because a balance sheet is not essential to accompany a receipts and payments account.