Income and Expenditure account is the same as the ——— of a sole trader

Q: Income and Expenditure account is the same as the ——— of a sole trader

Income and Expenditure account is the same as the --------- of a sole trader balance sheet cash book profit and loss account ✓ trading account Explanation Income and expenditure account is used by non-profit organizations to calculate surplus or deficit. It works exactly like a profit and loss account for businesses, using accrual accounting to match income with expenses. Balance sheet shows financial position, not income. Cash book records cash movements only. Trading account just calculates gross profit, not full income and expenses comparison. They're equivalent: Profit and loss = for-profit businesses. Income and expenditure = non-profit organizations.

Question

Answer 1

Income and Expenditure account is the same as the ——— of a sole trader

balance sheet
cash book
profit and loss account ✓
trading account

Explanation

Income and expenditure account is used by non-profit organizations to calculate surplus or deficit. It works exactly like a profit and loss account for businesses, using accrual accounting to match income with expenses.

Balance sheet shows financial position, not income. Cash book records cash movements only. Trading account just calculates gross profit, not full income and expenses comparison.

They’re equivalent: Profit and loss = for-profit businesses. Income and expenditure = non-profit organizations.