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.
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.
- 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
Syllabus Reference
Practice questions
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.
Give one example of a revenue-generating activity a club might run, other than membership subscriptions.
Worked solutions
Show worked solutions
Clubs and Societies — Practice: Solutions
Receipts/payments vs income/expenditure account.
What does the accumulated fund represent?
Cash $5,000, arrears $200 open, $300 close.
Cash $8,000, advance $150 open, $250 close.
Why wouldn’t new equipment appear in I&E?
Explain “surplus.”
Assets $12,000, liabilities $2,000. Find accumulated fund.
Fund $10,000, surplus $1,500. Find closing fund.
Why is receipts/payments simpler?
Example of another revenue-generating activity.
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