Clubs and Societies | O Level Accounting 7707 & IGCSE Accounting 0452 | Detailed Free Notes To Score An A Star (A*)
- Clubs and societies have two different types of revenue streams.
- First, the membership fee. It can be paid, prepaid or accrued.
- Secondly, it can make money from canteens and other side businesses as well.
- Receipts and Payments Account
- It can be considered a summarized cash and bank account
- Same rules applied
- The receipts are debits here.
- The payments are credits here.
- Income and Expenditure Account
- It is like profit and loss account
- Income is credited
- Expenditure is debited.
- The final accounts of a non-profit organization
- Income and expenditure account
- Surplus of income over expenditure (same as profit)
- Excess of expenditure over income (same as loss)
- Receipts and payments account
- If there is a side business, like a bar or canteen, first, a proper income statement will be generated for that business. Once that income statement has been generated, we can then move towards the Income and Expenditure account for the club/ society.
- Any one off events that generated profit/ loss will be calculated in the income and expenditure account as well.
- Income and Expenditure Account Format
| Income | $ | $ |
| Profit from the secondary business (bar/ caf̩/ canteen etc.) | Р| |
| Any profit from the one off event | – | |
| Subscription Earnings | – | |
| Donations | – | |
| Rent Received etc. | – | |
| Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Total Income | – | |
| Less: Expenditure | – | |
| Rates and Insurance | – | |
| Rent Paid | – | |
| Telephone Expense | – | |
| Utility Expense | – | |
| General Expenses | – | |
| Depreciation Expenses | – | |
| If any loss from secondary activity or one-off events. | – | |
| Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Total Expenditure | (-) | |
| Surplus of Income over Expenditure
Excess of Expenditure over Income |
- In the balance sheet/ statement of financial position
- There is no owner’s equity
- Instead, the part is called Accumulated Fund part.
- Simple format, accumulated fund at beginning plus surplus or reduce the loss.
- Receipt and Payment T Account
- Treat the same as cash and bank account
- Just change the heading.
- Subscription Account
- It is a confusing scenario because there can be many situations
- Some subscriptions are paid on time. They are income.
- Some subscriptions are paid before they are due, they are unearned income –Â a current liability
- Some subscriptions aren’t paid although the due date has passed, they are accrued income – a current asset.
- We have one single account for subscriptions.
- As a result, we often have two opening and closing balances for the subscription account.
- One is the opening and closing balance for unearned income
- The second is the opening and closing balance for accrued income.
- And the income that is right on time is shifted to the Income and Expenditure Account.
- Prepaid/ Unearned income
- Opening balance is on the credit side
- Closing Balance is on the debit side
- For accrued income
- The opening balance is on the debit side
- The closing balance is on the credit side.
- Transfer to the Income and Expenditure Account is shown on the debit side of the subscription Account
- It is shown in the income section of the Income and Expenditure account
