1. an
account covering a
particular financial
period and which records the
following: on the
right-
hand side or
credit side, the
value of the
MEST and
service particles outflowed or sold by the
organization in the
period concerned, i.e. the
value earned by the
organization in the
period. On the
left-
hand side or
debit side, the
value of
MEST and
service particles inflowed and used up by the
organization for the
period concerned. If the
value of the
outflow exceeds the
inflow side, then there is
profit; if the
value of the
inflow is greater, then there is a
loss.
(BPL 14 Nov 70 III) 2. the I&E A/C shows how much
value you received or gave out during a
period. The
income side of the I&E A/C is a summary of everything to do with the
Income Dept. The
expenditure side of the I&E A/C is a summary of everything to do with the Disbursements
Dept. The I&E A/C shows such things as the amount of
depreciation on your assets, and the amount of bad debts written off. These things have not been
paid out in
money but they are still an
expenditure. To reflect
reality, the I&E A/C must show how the
values of each
item have changed during the
period. After allowing for
depreciation and writing off bad debts, etc., add up the two sides of the I&E A/C. If the
income side totals more than the
expenditure side, then you have made a
profit-real
profit in
terms of
value not just an apparent
money profit.
(HCO PL 10 Oct 70 I) Abbr. I&E A/C.