Question

Income and Expenditure Account is prepared by

• A. Sole Trading Organisation
• B. Company Organisation
• C. Partnership Organisation
• D. None of these

Hint:

The Income and Expenditure Account is used by sole traders and non-profit organizations to track income and expenses, unlike the Profit and Loss Account used by companies.

Answer 1

The Correct Option is A

Step 1: Understanding Income and Expenditure Account.
The Income and Expenditure Account is prepared by organizations like sole traders or non-profit organizations, to record their income and expenses. It is similar to a profit and loss account but used in the context of non-commercial organizations.
Step 2: Analyzing the options.
- (A) Sole Trading Organisation: This is correct. The Income and Expenditure Account is primarily prepared by sole traders and non-profit organizations.
- (B) Company Organisation: This is incorrect. Companies generally prepare Profit and Loss Accounts.
- (C) Partnership Organisation: This is incorrect. Partnerships usually prepare a Profit and Loss Account, not an Income and Expenditure Account.
- (D) None of these: This is incorrect, as (A) Sole Trading Organisation is the correct answer.
Step 3: Conclusion.
The correct answer is (A) Sole Trading Organisation, as the Income and Expenditure Account is typically used by them.
Final Answer: The correct answer is (A) Sole Trading Organisation.