Clubs and non-profit making organisations (A Level) flashcards

Topic 18: Clubs and non-profit making organisations

Receipts and payments account vs income and expenditure account

Receipts and payments: a summary of the cash book, cash basis, includes capital items, no adjustments. Income and expenditure: accruals basis, revenue items only, includes depreciation, ends with a surplus or deficit.

Equipment $6,300; cash $1,140; subscriptions in arrears $90; in advance $210; hall hire owed $150. Accumulated fund?

6,300 + 1,140 + 90 − 210 − 150 = $7,170. The accumulated fund is the club's capital.

Subscriptions: arrears $240 and advance $180 at the start ($40 of arrears never paid); received $9,860; arrears $310 and advance $260 at the end

Credit side 180 + 9,860 + 40 + 310 = 10,390; debit 240 + 260 + balance. Balancing figure $9,890; income net of the $40 written off $9,850.

Opening subscriptions in advance $300 (no arrears); received $5,600; closing arrears $150; closing advance $420. Income?

300 + 5,600 + 150 − 420 = $5,630.

Bar: supplier payments $21,600; suppliers owed $1,420 then $1,180; inventory $2,300 then $2,050; takings $34,700; bar wages $6,900. Bar profit?

Purchases 21,600 − 1,420 + 1,180 = $21,360. Cost of sales $21,610; gross profit $13,090; bar profit $6,190, shown as one line.

Earlier life fees $4,800, fund $3,000; new fees $1,600; each fee spread over 8 years from the year received. Release and closing fund?

Release (4,800 + 1,600) ÷ 8 = $800. Closing fund 3,000 + 1,600 − 800 = $3,800.

Where is a legacy of $20,000 for a new pavilion recorded?

Added directly to the accumulated fund (or a named pavilion fund), not to income. A small general donation is income.

Subscriptions in arrears vs in advance

Arrears are owed to the club: a current asset. Advance payments are a current liability.

Why is receipts less payments not the surplus?

It includes capital receipts and spending, ignores accruals, prepayments and depreciation, and includes cash for other years such as arrears and advance subscriptions.

Income $14,200; expenditure $15,050. Result and effect on the accumulated fund?

A deficit of $850; the accumulated fund falls by $850.