Receipt and payment account . The difference between receipts and the payments represent the balance of cash in hand or at bank or bank overdraft at the closing date. Income and expenditure account: The different income and expenditure represent either surplus or defect balance.

Receipt Account:
Receipt account is a record that keeps track of all the money received by a business or individual over a specific period of time. It is also referred to as the cash book or cash account. This account is used to record all the inflows of cash, such as sales revenue, loans received, capital contributions, and any other sources of income.

Payment Account:
Payment account, on the other hand, is a record that keeps track of all the money paid by a business or individual over a specific period of time. It is also known as the cash disbursement account. This account is used to record all the outflows of cash, such as expenses, purchases of goods or services, loan repayments, dividends, and any other payments made.

Key Differences:

1. Purpose:
- Receipt account is used to record all the cash inflows or receipts, while the payment account is used to record all the cash outflows or payments made.

2. Nature of Transactions:
- Receipt account records all the transactions that result in an increase in cash or other equivalent assets, such as bank deposits, while payment account records all the transactions that result in a decrease in cash or other equivalent assets.

3. Types of Transactions:
- Receipt account includes transactions like sales revenue, loans received, capital contributions, interest received, rent received, and other sources of income. On the other hand, payment account includes transactions like expenses, purchase of goods or services, loan repayments, dividends, taxes paid, and other payments made.

4. Entry in the Books:
- In the receipt account, all the cash inflows are recorded as debits (increase in cash), while in the payment account, all the cash outflows are recorded as credits (decrease in cash).

5. Balancing:
- Receipt account usually has a debit balance, as it represents the inflow of cash. Payment account, on the other hand, usually has a credit balance, as it represents the outflow of cash.

6. Purpose of Information:
- Receipt account provides information about the sources of cash inflow and helps in analyzing the revenue generation and financial performance of a business. Payment account provides information about the cash outflow and helps in tracking the expenses and financial obligations of a business.

7. Financial Statements:
- The information recorded in the receipt account is used to prepare the income statement, whereas the information recorded in the payment account is used to prepare the expense statement.

Overall, receipt account and payment account are two essential components of the cash management system. While receipt account records the inflow of cash, payment account records the outflow of cash, providing a comprehensive picture of the financial activities of a business or individual.