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WAEC SSCE - Financial Accounting - 2007 (Objective)

Question 1 Report

Youngsters Club has a membership of 115 persons. Each member pays an annual subscription of ₦50. During the year ended 31st December 2005, 8 members had not paid their subscriptions. using the information, the subscriptions shown in the Balance sheet as at 31st December 2005 is
Answer Details
The subscriptions shown in the balance sheet as at 31st December 2005 would be considered a liability, as they are amounts owed to the club by its members. Since 8 members had not paid their subscriptions, the total amount of outstanding subscriptions would be calculated as follows: 8 members x ₦50 per member = ₦400 Therefore, the subscriptions shown in the balance sheet as at 31st December 2005 would be ₦400, listed as a liability owed to the club.
Read lesson note on Nature And Significance Of Accounting (JAMB)
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