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Income & Expenditure Account: Accounting Treatment

Last Updated : 05 Apr, 2023
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Illustration 1: 

From the following Receipts and Payment Account and additional information, prepare Income and Expenditure Account of GFG Organisation:


Additional information:

On 1st April,2021 ₹740 were unpaid subscriptions and ₹1,220 were unpaid on 31.3.2022. Rent Outstanding in the beginning as well as at the end  of year was ₹3,400. Depreciation is to provided on Furniture of ₹1,750 (in the beginning of the year, it was worth ₹33,000 ) and on Books ₹1,890 (in the beginning of the year, it was worth ₹22,020 ). Salaries outstanding on 31.3.2022 was ₹1,200.



Illustration 2:

Prepare Income and Expenditure Account for Geeks Organisation from the information given below:


Additional information:

1. There are 270 members each paying an annual subscription of ₹75 and ₹1,000 being in arrears for 2020-21 in the beginning of the year.

2. Cost of Building is ₹20,500. Depreciate it by 8%.

3. Amounts outstanding on 31.3.2022- Postage ₹640 and Electricity charges ₹450.

4. ₹280 paid in advance for sundries.

5. Prepaid insurance premium ₹660 on 2021 and ₹ 1,060 on 2022. 




1. Insurance Premium to be debited to Income & Expenditure A/c:

=Prepaid premium (Opening) + Paid during the year – Prepaid premium (Closing)

= ₹660 + ₹16,600 – ₹1,060                                                                                    

=₹ 16,200                                                                                                            

2. Subscription to be credited to Income & Expenditure A/c:


Illustration 3:

From the following information prepare Income and Expenditure Account of GG Club for the year ended on 31st March,2022:


Additional information:


1. 50% of the Donations are to be capitalized.

2. Loan from Bank was taken on 1st July,2021 at 15% p.a.




1. Member’s Subscriptions for the year 2021-22:


2. Interest on Bank Loan = 8000\times \frac{15}{100}\times \frac{9}{12}

= ₹900

3. Profit from Tinned Provision Account:


4. Depreciation on Equipment Account:


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