IGCSE Accounting — Clubs and Societies: Notes, Practice Questions & Worked Solutions

IGCSE Accounting 0452 · Section 5.5: Clubs and Societies

Clubs and Societies

Not-for-profit organisations use different names for familiar ideas: “capital” becomes the accumulated fund, and “profit” becomes a surplus (or a deficit, if expenditure exceeds income).

1. Two Different Summaries

Statement	Basis
Receipts and payments account	Cash basis — simply a summary of the cash book (all money in and out) for the year
Income and expenditure account	Accruals basis — like a statement of profit or loss, matches income/expenditure to the year, excludes capital items

2. Subscriptions

Subscription income for the income and expenditure account must be adjusted for amounts owing and prepaid, at both the start and end of the year.

Subscription income = Cash received + Closing arrears − Opening arrears + Opening advance − Closing advance

Worked example — subscription income Cash received from subscriptions during the year: $5,000. Subscriptions owing (arrears): $200 at the start of the year, $300 at the end. Subscriptions received in advance: $100 at the start, $150 at the end. Calculate the subscription income for the income and expenditure account.
5,000 + 300 − 200 + 100 − 150 = $5,050

3. The Accumulated Fund

The accumulated fund is the club’s equivalent of capital — calculated at the start of the year as total assets minus total liabilities, then increased by any surplus (or decreased by a deficit) during the year, just like a sole trader’s capital account.

Common mistakes to watch for

Including capital items (e.g. buying new equipment) in the income and expenditure account — these belong in the statement of financial position, not treated as ordinary expenditure.
Forgetting that “life membership” fees are usually spread over several years’ income, not counted entirely in the year received.
Mixing up the direction of the subscription adjustment — always check whether an amount relates to income already earned (arrears) or not yet earned (advance).

Key Vocabulary Recap

Accumulated fund — a club’s equivalent of capital

Surplus / deficit — a club’s equivalent of profit / loss

Syllabus Reference

This note covers IGCSE Accounting 0452 Section 5.5, Clubs and Societies: receipts and payments accounts, income and expenditure accounts, revenue-generating activities, subscriptions, statements of financial position, and the accumulated fund.

Practice questions

IGCSE Accounting 0452 · Section 5.5: Clubs and Societies — Practice Question Bank (no answers)

Clubs and Societies — Practice

Covers: receipts and payments, income and expenditure, subscriptions, and the accumulated fund. 10 questions.

Explain the difference between a receipts and payments account and an income and expenditure account.

Explain what the accumulated fund represents.

Cash received from subscriptions during the year is $5,000. Subscriptions owing are $200 at the start of the year and $300 at the end. There are no subscriptions in advance. Calculate the subscription income for the year.

Cash received from subscriptions during the year is $8,000. Subscriptions received in advance are $150 at the start of the year and $250 at the end. There are no subscriptions owing. Calculate the subscription income for the year.

Explain why a club’s purchase of new sports equipment would not appear in the income and expenditure account.

Explain the term “surplus” as used in a club’s accounts.

A club’s assets total $12,000 and liabilities total $2,000 at the start of the year. Calculate the accumulated fund at the start of the year.

The accumulated fund at the start of the year is $10,000, and the club makes a surplus of $1,500 during the year. Calculate the accumulated fund at the end of the year.

Explain why a receipts and payments account is considered a simpler summary than an income and expenditure account.

Q10

Give one example of a revenue-generating activity a club might run, other than membership subscriptions.

Worked solutions

Show worked solutions

IGCSE Accounting 0452 · Section 5.5: Clubs and Societies — Solutions

Clubs and Societies — Practice: Solutions

Receipts/payments vs income/expenditure account.

✓A receipts and payments account is a simple cash-basis summary of all money received and paid during the year (like a summarised cash book). An income and expenditure account is prepared on an accruals basis, matching income and expenditure to the year they relate to and excluding capital items — similar to a statement of profit or loss.

What does the accumulated fund represent?

✓The accumulated fund is a club’s equivalent of capital — the club’s total assets minus total liabilities, updated each year by adding any surplus or subtracting any deficit.

Cash $5,000, arrears $200 open, $300 close.

Income = Cash + Closing arrears − Opening arrears

5,000+300−200

✓$5,100

Cash $8,000, advance $150 open, $250 close.

Income = Cash + Opening advance − Closing advance

8,000+150−250

✓$7,900

Why wouldn’t new equipment appear in I&E?

✓Buying new equipment is capital expenditure — it creates a non-current asset for the club, so it appears in the statement of financial position, not as an item of expenditure for the year in the income and expenditure account.

Explain “surplus.”

✓A surplus is a club’s equivalent of profit — the amount by which total income exceeds total expenditure for the year, as shown by the income and expenditure account.

Assets $12,000, liabilities $2,000. Find accumulated fund.

Accumulated fund = Assets − Liabilities

12,000−2,000

✓$10,000

Fund $10,000, surplus $1,500. Find closing fund.

Closing fund = Opening fund + Surplus

10,000+1,500

✓$11,500

Why is receipts/payments simpler?

✓It simply lists actual cash received and paid during the year, with no adjustments needed for accruals, prepayments, or depreciation — unlike the income and expenditure account, which requires matching income and expenditure to the correct period.

Q10

Example of another revenue-generating activity.

✓Any valid example, e.g. running a bar/refreshments stall, hosting a fundraising event, or selling club merchandise.

Book a free trial class

Tell us a little about your requirement.