clubs and societies. © hodder education 2008 the accounts of non-profit making organisations they...
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Clubs and SocietiesClubs and Societies
© Hodder Education 2008
The accounts of non-profit making organisations
They are organisations that provide facilities to their members. For example, sports clubs, social clubs, amateur dramatics societies, etc.
© Hodder Education 2008
These organisations may receive income
in the form of:
Membership fees or annual subscriptions
Donations Funds raised from raffles, fetes,
etc. Revenue from the sale of food
and drink to members
© Hodder Education 2008
The money raised is used to meet running expenses, such as rent, light and heat, etc.Clubs, associations and other non-profit making organisations do not have trading profit and loss accounts as their main purpose is not trading or profit making.
© Hodder Education 2008
New terms used in the accounts of clubs and societies
An income and expenditure account is prepared in place of a profit and loss account.
Surplus of income over expenditure is used in place of net profit.
Excess of expenditure over income is used in place on net loss.
Accumulated fund is used in place of the capital account.
Receipts and payments account summarises all the transactions that have passed through the bank account.
© Hodder Education 2008
Profit or loss for a special purpose
When an event is organised to raise money to supplement the income of the organisation, for example a golf club organising a dinner dance.
Profits are transferred to the income and expenditure account as income, e.g. profit on bar, disco, etc.
© Hodder Education 2008
The following information is available for the McKinnon Tennis Club for the year ended 31 December 2007
£Subscriptions 8,000Dinner dance 3,200Bar receipts 16,300
£Balance b/d
600Dinner dance cost
1,900Wages bar staff
6,200Maintenance
3,000Heat and light
1,300Bar purchases
4,800General expenses
2,500
The following information is also available: £ £1/1/07 31/12/07
Heat & light accrued 200 160Bar stock 2,500 2,100Creditors’ bar purchases 1,400 800Subs due and unpaid 200 400Subs paid in advance 1,500 900Equipment 9,400 7,600
1) Bar staff salaries are the only expenses in the bar trading account.Prepare:The Bar trading account for the year ended 31 December 2007.The income and expenditure account for the year ended 31 December 2007.The balance sheet as at 31 December 2007.
© Hodder Education 2008
McKinnon Bar trading account for the year ended 31 December 2007
£ £Sales 16,300Opening stock 2,500Purchases (4,800-1400+800) 4,200
6,700Closing stock 2,100
4,600Gross profit 11,700Less bar staff salaries 6,200Bar profit 5,500
© Hodder Education 2008
To calculate the subscriptions we will need to draw
Balance b/d 200
Balance c/d 900
Balance b/d
1,500
Bank
8,000
Balance c/d
400
Dr Subscriptions account Cr
If we balance the account we can find the subscriptions that relate to the year ended 31 December 2007.
© Hodder Education 2008
Balance b/d 200
Income & exp 8,800
Balance c/d 900
9,900
Balance b/d
1,500
Bank
8,000
Balance c/d
400
9,900
Dr Subscriptions account Cr
© Hodder Education 2008
McKinnon income and expenditure account for the year ended 31 December 2007
IncomeSubscriptions 8,800Profit from bar 5,500Profit from dinner dance 1,300
15,600ExpensesHeat & light (1300 -200 + 160) 1,260Maintenance 3,000General expenses 2,500Depreciation – equipment 1,800
8,560Surplus of income over expenditure 7,040
© Hodder Education 2008
Balance sheet as at 31 December 2007
Fixed assetsEquipment 7,600Current assetsStock 2,100Bank 7,200Subs in arrears 400
9,700Current liabilitiesCreditors 800Accruals – heat & light 160Subs in advance 900
1,860Working capital 7,840
15,440Financed by:Accumulated fund 8,400Plus surplus of income over expenditure 7,040
15,440
© Hodder Education 2008
Tips
Different terms are used - marks are awarded for the use of different terms.
You will probably have to calculate the value of subscriptions, using a ‘T’ will help.
A specific subscriptions account may be required. Net values where there is income and expenditure
for the same activity.
© Hodder Education 2008
Tasks
Complete task sheet and OCR exam question.