Sess (eae Note: for convenience throughout the remainder of this section reference is made to clubs. However, all the points made could equally well apply t0 any non-profit making organisation, Receipts and payments account Clubs may receive money from a variety of sources Here are some typical examples: + members: in the form of an annual subscription + money-raising activities * loans + donations. The club treasurer will be responsible for making the following payments: + running costs + expenses of money-raising activities * purchase of non-current assets + repayment of loans. All these transactions will be recorded in a cash book which is summarised at the end of each financial year in the form of a receipts and payments account. ‘THE RIVERFORD COMMUNITY CLUB. Receipts and Payments Account for the year ended 31 December 2012 RECEIPTS, ‘Opening balance of cash in hand and cash at bank ‘Members’ subscriptions Sales of refreshments Donation from local business Loan from member $ 1,420 2,750 445, 200 PAYMENTS. s Hire of community hall 880 Refreshment costs 332 Guest speakers’ fees 660 Interest on loan from member 36 Purchase of equipment 2,200 Club secretary's expenses Closing balances of cash in hhand and cash at banksubscriptions The major source of income for most clu paid by each member. It is important to {see 6.1) when calculating the correct ay club's income and expenditure account form of an arithmetical process or prepa bs Is an annual subscription apply the accruals concept MOUNT to be recorded in the Calculations can take the Ng a Subscriptions account. | Subsenptions due at 1 January 2012 Excluded because these are subscriptions for 2011 Subscriptions recewved in advance at 1 January 2012 Included because these are subscriptions for 2012 Subscriptions received during the year ended 31 December 2012 Included because these are subscriptions for 2012 Subscriptions due at 31 December 2012 Included because these are subscriptions for 2012 Subscriptions received in advance at 31 December 2012 Excluded because these are subscriptions for 2013, |_ [Subscription income for 2012 13,200 | Alternatively a subscriptions account would record these details as follows: Subscriptions Account $ 450 13,200 350 Balance (1 Ja) due | Income and expenditure account Balance (31 Dec) received in advance /d Balance (31 Dec) due b/d Galion Balance (1 Jan) received in advance Receipts Balance (31 Dec) due od 1 a List three typical receipts for a sports club; b lst three typical payments for a drama society 2 Describe how a receipts and payments account is useful to members of a non-profit making organisation, 3. A club has 720 members and the annual subscription is $20 per member. What is the club’s annual subscription income? income for 2012? For further practice try Section B Question 2 on page 168, A society has received $10,000 in subscriptions during 2012 On 1 January members owed subscriptions $1,200 for 2011 On 31 December 2012 members had paid subscriptions in advance of $700 for 2013. What is the club’s subscription