Clubs And Societies
Overview
A sports club, a drama group or a scout troop does not trade to make a profit for an owner; it exists to give its members a service. Yet it still handles money, owns equipment, owes bills and collects subscriptions, so it still needs accounts. The accounting is the same at heart as for a business, but the names change: profit becomes surplus, capital becomes the accumulated fund, and the main income is members' subscriptions rather than sales.
In this lesson you will learn the difference between a receipts and payments account, which is just a cash summary, and an income and expenditure account, which matches income to the year it relates to. You will master the subscriptions account, the part most students find tricky, handle small trading activities such as a refreshment bar, and calculate the accumulated fund. By the end you will be able to prepare a full set of club statements with confidence.
Objectives
- receipts and payments accounts and income and expenditure accounts.
- how to prepare receipts and payments accounts.
- how to prepare accounts for revenue-generating activities, e.g. refreshments, subscriptions.
- how to prepare income and expenditure accounts and statements of financial position.
- how to make adjustments to financial statements as detailed in 5.1 (sole traders).
- how to define and calculate the accumulated fund.
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Lesson Evaluation
Congratulations on completing the lesson on Clubs And Societies. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- What is the club equivalent of the profit for the year of a business? A. Deficit B. Surplus C. Accumulated fund D. Gross profit Answer: B
- Subscriptions received $5 600; owing at end $260; owing at start $300; in advance at start $120; in advance at end $180. What is the subscriptions income for the year? A. $5 400 B. $5 500 C. $5 600 D. $5 700 Answer: B
- Which item should NOT appear in an income and expenditure account? A. Depreciation of equipment B. Subscriptions income C. Purchase of new equipment D. Profit on refreshments Answer: C
- A club's accumulated fund was $30 480 at the start of the year and it made a surplus of $793. What is the closing accumulated fund? A. $29 687 B. $30 480 C. $31 273 D. $31 760 Answer: C
- A receipts and payments account is best described as: A. A statement of financial position B. A summary of the cash book C. A trading account D. A list of members Answer: B
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