Denbigh High School

Principles of Accounts
Lesson Notes
Topic: Non- Profit Making Organizations

Sub-Topic: Receipts & Payments Accounts

Non-Profit Making Organization – these are organizations whose main aim is not to make a
profit but to provide a service to its members.

The Accounts for Non-profit making Organization

● Bar Trading Account – used to calculate the gross profit to be transferred to the
Income and Expenditure

● Receipts and Payment – this is similar to that of a cashbook. It is used to record

money received and paid out over the period.

● Income and Expenditure – this is similar to a profit and loss a/c. It is used to record all
incomes and expenses for the period.

● Subscription Account – used to record the subscription (fees collected from members).

● Balance Sheet – same as the normal Balance Sheet it is just that a few terms are
worded differently.

New Terms used for Non- Profit Making Organization

● Bar taking/Bar Sales- Sales

● Accumulated Fund - Capital

● Subscription Owing – Debtor

● Subscription owing at the end of the period is treated the same way as debtors.

● Donations are usually treated as income of the period in which they are
received.

NB In a Sole Trader/ Partnership Capital + Liabilities = Assets

In a non-Profit making Organization Accumulated Fund + Liabilities = Assets

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 Format of a Receipts and Payments Account

Long Lane
Receipts and Payments account for the year ended 30th June 2006
Receipts $ Payments $
Bank balance/bal b/d/ b/f xxx Bank overdraft xx
Subscription Received xx Staff Pay xx
Rent Received xx Rates xx
Donations xx Insurance xx
Bar takings xx Bar Purchases xx
Bal c/d xx
xxx xxx
Balance b/d xx

NB
1. The bank balance or balance brought down is from the previous year.
2. Bank overdraft is also from the previous year. This is when the bank has a
negative balance,the owner took out more money than what is in the business
account.
3. The Closing balance from this account is transferred to the balance sheet as the
bank balance.

Steps to write up the Receipts and Payments Account

1. Enter the opening cash/bank balance on the debit side (under receipts) as the balance
b/d or b/f. If there is a bank overdraft enter the balance on the credit side (under
payment) as the balance b/d or b/f.
2. Enter ALL transactions having to do with receipt on the debit side.
3. Enter ALL transactions having to do with payment on the credit side.
4. balance off the account by entering the difference (balance c/d) on the smaller side
then make both sides equal.
5. Enter the difference (balance on the larger side as the balance b/d)

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Question 1

The East Point Social Club has 600 members, each paying an annual subscription of $50.
Rent is payable of $500 per month. All money received is banked immediately.
All payments are by cheque
On 31 December 2004 the financial position of the club was as follows.
$
Balance at bank (overdraft) 1650
Equipment 16100
Fixtures 2100
Refreshment bar stocks 550

Twenty - four members did not pay their 2004 subscriptions until 2005.
During the year to 31 December 2005, the following transactions occurred
$

Refreshment bar purchases paid for 6150

Refreshment bar takings 8960
Subscription received 30100
Rent paid 5000
Refreshment bar staffs pay 1880
Purchases of equipment 8900
Insurance paid 1570
Affiliations fees paid 360
Donations received 4240
Transport expenses 7140
Ground staff pay 9370

You are to draw up the receipts and payments account for the year ended 31 December
2005

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Question 2

The treasurer of the CapeView Sports Club has provided the following details about the

club’s receipts and payments for the year ended 30 September 2019.

The club had a balance of cash at bank of $3120 on 1 October 2018. During the year ended

30 September 2019 subscriptions received from members totalled $22450, competition

receipts totalled $4190 and a donation of $5000 was received from a local business.The

treasurer paid administration expenses of $6400, rent of the club’s sports ground $8300,

purchases of new sports equipment $14500 and wages of grounds staff $6650

Required: Prepare the Receipts and Payments Account for the year ended 30 September

2019 to show the closing balance at bank

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 PAST PAPER QUESTIONS

Question 1

The Abby Sports Club has 150 male and 200 female members. Both groups engage in
separate sports activities and maintain separate Receipts and Payments accounts.

Males
Receipts and Payments
For the period ending June 30, 2000
$ $
Bank balance b/f 500 Printing & stationery 1 250
Subscriptions received for the Repairs to equipment 1 120
period 11 800 Upkeep of grounds 1 400
Rent received for use of Wages for security 3 000
equipment 1 300 Bank balance 30/6/2000 6 830

13600 13600

Females
Receipts and Payments
For the period ending June 30, 2000
$ $
Bank balance b/f 1 500 Payment for bar supplies 6 000
Subscriptions received: Barman wages 2 000
In advance 1 300 Bar expenses 1 500
In arrears(1999) 1 600 Coach fees 8 000
For this period 15 000 Repairs to equipment 2 000
Bar sales 11 000 Printing & stationery 1 800
Bank balance 30/6/2000 9 100
30400 30400

Information obtained from the Books of Abby Sports Club were as follows:

Opening stock of bar supplies $700

Closing stock of bar supplies $800
Barman wages owing June 30, 2000 $200
Bar expenses owing June 30,2000 $150
Depreciation for the period on club house $1 200
Subscription owing for the period: Males $600
Females $400

There were no amounts owing for bar supplies at start and end of the period.

(a) Prepare for Abby Sports Club the following:

(i) A combined Receipts and Payments Account for the period ending June 30,
2000. (6marks)

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Question 2
During the year ended 31 August 2016, Miracle Charity Group recorded the following
cash-based activities

Purchased foodstuff 93 680

Received full subscription for 275 members 222 750

Donations 8 100

Received government grant 83 595

Purchased new furniture 12 445

Added ten rooms to building 98 000

Paid wages 45 865

Paid for painting of old rooms 1 675

Prepare a Receipts and Payments Account for Miracle Charity Group for the year ended 31
August 2016