Subscription prepared by members is recorded in the balance sheet of a club as a

Subscription prepared by members is recorded in the balance sheet of a club as a current liability. A current liability is a financial obligation that a company or organization is obligated to pay off within a year or an operating cycle, whichever is longer. Subscription prepared by members represents the amount of money that the club members have paid in advance for future services or events. As these services or events will be provided in the future, the subscription is recorded as a liability because the club is yet to fulfill its obligation to the members. Hence, subscription prepared by members is shown on the liability side of the club's balance sheet until the services or events are provided, at which point it will be recognized as revenue.