Receipts and payments account vs income and expenditure account
A receipts and payments account is a simple summary of all cash actually received and paid during a period -- like a cash book summary, not adjusted for amounts owed or prepaid. An income and expenditure account is the not-for-profit equivalent of a profit and loss account -- it applies accrual accounting, adjusting for amounts owed or paid in advance, to show the true surplus or deficit for the period, not just cash movements.
Example 1: A club's receipts and payments account shows subscriptions received of ₦300,000 during the year, but ₦20,000 of last year's subscriptions were received this year, and ₦15,000 of this year's subscriptions are still outstanding. Find the subscription income for the income and expenditure account.
Subscription income = cash received - amounts relating to a previous period + amounts owed for this period = .
Fund accounting for not-for-profits
Instead of "capital" as used by profit-making businesses, not-for-profit organizations often refer to their net worth as "accumulated fund" -- built up from surpluses over time (a surplus adds to it, a deficit reduces it), since there's no owner drawing profit and no share capital in the traditional sense.