Correct Option: C. Interest on bank deposit Explanation of Why Option C is Correct: A receipts and payments account is a financial statement used primarily by non-profit organizations, clubs, and societies to summarize cash transactions over a specific period. It records all cash inflows (receipts) and outflows (payments) without considering the timing of when the transactions occur. Interest on Bank Deposit is included in the receipts and payments account because it represents actual cash received during the accounting period. When a club earns interest on its bank deposits, this interest is a cash inflow that is recorded in the receipts section of the account. Why the Other Options are Incorrect: A. Accrued expenses on annual dances - Explanation: Accrued expenses are costs that have been incurred but not yet paid. They represent a liability and are not recorded in the receipts and payments account because this account only reflects cash transactions. Since no cash has been paid out for these expenses yet, they do not appear in the receipts and payments account. B. Subscriptions due but not yet received - Explanation: Similar to accrued expenses, subscriptions that are due but not yet received represent amounts that are owed to the organization but have not yet been collected in cash. These amounts are recorded in the accounts receivable and not in the receipts and payments account, as the account focuses solely on actual cash transactions. D. Depreciation of the club house - Explanation: Depreciation is a non-cash expense that reflects the reduction in value of an asset over time. It does not involve any cash outflow during the accounting period and therefore is not recorded in the receipts and payments account. Instead, depreciation is recorded in the income statement and affects the profit or loss of the organization. Summary of Key Points:

• The receipts and payments account records actual cash transactions, focusing on cash inflows and outflows.
• Interest on bank deposits is a cash inflow and is included in the receipts and payments account.
• Accrued expenses and subscriptions due are not included as they do not represent cash transactions.
• Depreciation is a non-cash expense and is not recorded in the receipts and payments account.

Revision Summary:

• Receipts and payments account reflects cash transactions only.
• Cash inflows include items like interest earned.
• Accrued expenses and amounts due are not recorded in this account.
• Non-cash expenses like depreciation are excluded from the receipts and payments account.