income and expenditure account

Income Statement or Income and Expenditure Statement?

In accounting, the Income Statement includes revenues (in-flow) and expenses (out-flow). The term "income" is the excess of revenues over expenses. Sometimes, it is also known as the "net income".

However, in social welfare agency reports, we can frequently find "income and expenditure statement" or "income and expenditure account". They use the term "income" instead of "revenue". This is basically improper. However, this practice in social welfare agencies is usually tolerated. For a for-profit organization, "income" is the net increase in the owner's equity.

　

Income - revenue - cash

Income = Revenues - Expenses

Increase in cash has nothing to do with revenue or income. One borrows $10,000 from the bank. Then, the person has an increase of $10,000 cash (i.e. of asset), and liability of $10,000 to the Bank. He then uses the $10,000 to buy a piece of equipment, i.e. a reduction of $10,000 in cash, and an increase in fixed asset of $10,000.

　

　

Expense or Expenditure

Strictly speaking, an "expenditure" is not necessarily an "expense". For example, we buy $400 fuel for our car. It is an expenditure. If we do not use the fuel, it remains to be our asset, and we have not incurred an expense. If we use 3/4 of the fuel, the expense will then be $300 and we still have an asset of fuel which is valued at $100.

Similarly for equipment items, at the time of acquisition we have an "expenditure" item and no "expense". When we depreciate the equipment item, we then have an "expense" equal to the amount of depreciation.

The above distinction between expense and expenditure is frequently ignored in social welfare agencies. For example, when a centre buys a piece of Hi-Fi for $4,000. It is an expenditure. The centre has an expenditure of $4,000 cash and yet has an increase of asset value equivalent to $4,000. There is not expense yet. When the centre "depreciates" the Hi-Fi, say by $1,000, the centre has an expense of $1,000 and with $3,000 asset. However, since many social welfare agencies depreciate the equipment totally during the year of acquisition, expenditure becomes expense at the same time. The distinction between expense and expenditure becomes unimportant.

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income and expenditure account即係我地做account既叫做I&E

係做收入同支出既數, 最後計返個盈餘或者赤字出黎

而I & E係只會用於clubs, 聯會, 或者係一d非謀利機構既

如果係一般既公司就會用profit and loss account既

咁I&E多數會用 Receipts and Payment account一齊做既,
呢個account即係等於一般公司既CASH BOOK / BANK A/C

I&E包括既野會有個club既收入啦, 主要係會員費啦, Donations,

另外一邊都會有一d club入面既支出費用既, 好難例晒出黎比你睇, 可以係文具呀, 水電煤呀, 行政費, 郵費, 租金, 乜都可以係, 只係係個club既支出就得喇