Use the following information to answer questions 11 and 12. Receipt and Payments: 31st December, 2016 The total income received for the year is

This question tests the ability to identify and sum up income items in a Receipts and Payments Account of a non-profit organisation (such as a club or society).

A Receipts and Payments Account is a summary of all cash and bank transactions during a period. The receipts (debit) side lists all money coming in, and the payments (credit) side lists all money going out. However, not every item on the receipts side counts as income.

To find the total income received for the year, you must include only those receipt items that represent revenue or income earned during the year. These typically include:

• Subscriptions received
• Entrance fees
• Donations received
• Hall hire or rental income
• Proceeds from fundraising activities

You must exclude the following from total income:

• Opening balance (balance brought forward from the previous year) - this is not income; it is simply the cash or bank balance the organisation started the year with
• Capital receipts such as proceeds from sale of fixed assets or investments, and loans received - these are not revenue income

By adding together all the income items on the receipts side of the account (excluding the opening balance and any capital receipts), the total income received for the year amounts to #2,640.

Exam tip: When asked for "total income received," always exclude the opening cash/bank balance brought forward. The opening balance represents funds already held, not income earned during the current period.