What are the main features of income and expenditure?
Jenniferrichard 
In financial accounting, an Income and Expenditure Accounting Services Buffalo is a summary of all revenue and expenses for a specific period (usually a fiscal year). While it is most commonly used by non-profit organizations (NPOs) like clubs, charities, and schools, the underlying features provide a roadmap for anyone looking to understand their financial health.
Unlike a personal "bank statement" that just shows cash moving in and out, an Income and Expenditure account follows specific structural rules.
1. The "Nominal" Nature
In accounting terms, this is a Nominal Account. It follows a simple, age-old rule:
Debit all expenses and losses (left side).
Credit all incomes and gains (right side). It does not carry over a "starting balance" like a cash book; it starts fresh every year to measure performance specifically for that 12-month window.
2. Accrual Basis of Accounting
This is the most critical feature. The account records income and expenses when they occur, not necessarily when the cash changes hands.
Income: If you earned interest in December but haven't received the check yet, it is still recorded as income for that year.
Expenses: If you used electricity in December but won't pay the bill until January, it is still recorded as a current expense.
3. Revenue Items Only
The account strictly excludes "Capital" transactions. This ensures the focus remains on day-to-day operations.
Included: Recurring items like salaries, rent, subscriptions, and utility bills.
Excluded: Buying a building or a car (these are assets that go on a Balance Sheet) or taking out a long-term loan.
4. Non-Cash Adjustments
Unlike a simple receipt log, an Income and Expenditure Accounting Services in Buffalo for "invisible" costs.
Depreciation: It records the wear and tear of assets (like computers or machinery) as an annual expense.
Provisions: It accounts for potential losses, such as "doubtful debts" (money people owe you that you might not collect).
5. The "Bottom Line": Surplus vs. Deficit
Since non-profits don't exist to make "profit," the final result of this account is titled differently:
Surplus: When Income > Expenditure. This extra money is added to the "Capital Fund" to fuel future missions.
Deficit: When Expenditure > Income. This indicates the organization is dipping into its reserves to stay afloat.
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