Introduction:
In non-profit organizations, legacies are treated as capital receipts in the receipt and payment account. A legacy refers to a gift or bequest of property or money that is left to an organization in a will. Legacies are an important source of funding for non-profit organizations as they provide a significant amount of financial support.

Reasons for treating legacies as capital receipts:
There are several reasons why legacies are treated as capital receipts in the receipt and payment account of non-profit organizations:

1. Non-recurring nature: Legacies are generally one-time donations that occur when an individual passes away and leaves a gift to the organization. They are not regular or recurring sources of income for the organization. As such, they are treated as capital receipts rather than revenue or income.

2. Long-term financial planning: Legacies are often intended to provide long-term financial support to the organization. They are typically larger sums of money or valuable assets that can be used to fund ongoing projects or create an endowment for the organization. Treating them as capital receipts allows the organization to allocate and manage these funds in a way that ensures their long-term sustainability.

3. Capital expenditure: Legacies are often used to finance capital expenditure projects, such as the construction or renovation of buildings, purchase of equipment, or establishment of new facilities. By treating legacies as capital receipts, the organization can accurately reflect the use of these funds for capital expenditure purposes.

4. Separation from operational income: Treating legacies as capital receipts helps to distinguish them from the organization's operational income. Operational income includes regular sources of funding such as donations, grants, membership fees, and program fees. By separating legacies as capital receipts, the organization can track and report on the specific use and impact of these funds separately from its day-to-day operational activities.

5. Accounting treatment: Legacies are typically accounted for as capital receipts in accordance with accounting principles and standards. This ensures consistency and comparability in financial reporting across different organizations.

Conclusion:
In conclusion, legacies are treated as capital receipts in the receipt and payment account of non-profit organizations due to their non-recurring nature, long-term financial planning implications, use for capital expenditure, separation from operational income, and adherence to accounting principles. This treatment allows organizations to effectively manage and allocate these funds for the benefit and sustainability of the organization.