ACCOUNTS OF CLUBS AND SOCIETIES

Clubs and society- is a non-trading organisation which is formed to provide facilities and services for
members. They are not formed with the aim of making a profit. Members pay subscription every year or
month which is the main income source of the club or society.

Sources of income for clubs or society:

1. Donations are provided by the member or other organisations.

2. Subscriptions- are amounts members of an organisation pay, usually annually to use the facilities
provided by the clubs or society
3. Entrance fees for special events
4. Sales of old assets at a profit
1. Profit from bar or canteen used by the members.

Receipts and Payments Accounts: It is a summary of cashbook, i.e. all cash and bank transactions during
a given period of time. It starts with an opening balance and debited with all items of receipts. It is
credited with all payments made during the year.

Income and Expenditure Account: Income and expenditure account is prepared annually by a non-
trading organisation. It records the income and expenses of the non-trading organisation for the year to
calculate the surplus or deficit.
This account serves exactly the same purpose as the profit and loss account in a trading concern.
A surplus arises when the income of the club or society is greater than its expenses. It is similar to profit
for the year.
A deficit arises when the income of the club or society is lower than its expenses. It is similar to loss for
the year

Accumulated Fund: It is the surplus accumulated within the organisation over its life. It replaces the
capital in the SFP of a club or society.

Differences between receipts and payments account and Income & Expenditure account.
Receipts & payments Income & Expenditure A/c
1. Receipts & payments A/c basically is cash 1. Income & Expenditure A/c is made for Non-
book which records all the cash inflows and profit making organization to find out their
outflows of a business for a particular performance, whether there is a surplus of
period of time income over expenditure and vice versa.
2. Receipts & Payments A/c is prepared on 2. Income & Expenditure A/c is made on
cash basis. accrual basis or matching concept.

Comparison of terms used for profit and not for profit organisation

Profit making organisation Not for profit organisation

Income statement Income and expenditure account
(Net) profit or loss for the year Surplus or deficit
Cash book Receipts and payments
Capital Accumulated fund
Accountant Treasurer
Aim is to make profit Aim is to work for social welfare

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Dr. Subscription account Cr.
Date Details $ Date Details $
Balance b/d (accrued/ owing xxx Balance B/d (prepaid xxx
subscriptions) subscription)
Income and expenditure account xxx Bank xxx
(bal. fig.)
Bad debts xxx
Balance c/d (prepaid subscription) xxx Balance c/d (owing subscription) xxx
xxx xxx

Receipts and payments account

Date Details $ Date Details $
Balance b/d (Debit) xxx Balance b/d (credit or overdraft) xxx
Subscription received xxx Payments for bar supplies xxx
Bar sales xxx Grounds men wages xxx
Ticket sales xxx Bar expenses xxx
Donation received xxx Hire of coaches xxx
Printing and stationary xxx
Cost of tickets xxx
Payments to purchase assets xxx
Balance c/d (overdraft) xxx Balance c/d (debit) xxx
xxx xxx

Bar trading account

£ £
Sales revenue (Bar takings banked from receipt and payment account) xxx
Less cost of sales-
Opening inventory of refreshments xxx
Add: Purchases of refreshments xxx
Add: Carriage inward xxx
Less: Closing inventory of refreshments (xxx)
(xxx)
Gross profit from bar xxx
Less: Bar manager’s salary xxx
Less: Bar rent xxx
Less: Bar equipment depreciation xxx
(xxx)
Profit from bar xxx

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 Clubs and society
Income and expenditure account for the year ended
Details $ $
Income:
Subscription from members xxx
Profit from bar xxx
Profit from sale of ticket xxx
Donation received xxx
Total income xxx

Less- Expenses:
Rent and rates xxx
Ground men wages xxx
Hire of coaches xxx
Heating and lighting xxx
Stationary xxx
Postage and telephone xxx
Depreciation of non- current assets xxx
Total expenses (xxx)
Surplus/ (Deficit) xxx

Exercise 1
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a) Prepare the subscription account for the year ended 30 April 2018. [4]
b) Calculate the profit or loss on the special event [2]
c) Prepare the income statement of the sports clothing shop for the year ended
30 April 2018. [5]
d) Prepare the income and expenditure account for the year ended 30 April
2018. [7]
e) Explain why subscription paid in advance will be shown as a liability in the
statement of financial position of the W sports club

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Solution
Dr. a) Subscription account (OPPO) Cr.
Date details $ Date Details $
2017 Balance bd (owing) 75 2017 Balance bd (prepaid) 60
May 1 May 1
2018 Income & expenditure 2018
April 30 account (balancing figure) 1800 April 30 Bank 1820
Balance cd (prepaid) 50 Balance cd (owing) 45
1925 1925

2018 Balance bd 45 2018 Balance bd 50

May 1 May 1

b) Special event Income statement for the Year ended 30 April 2018
$
Revenue form salke of ticket 1080 1080

Less: expense
Catering 600+ 250 850
wages 180
1030
Profit from special event 50

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