NON-TRADING ORGANISATIONS

Subscriptions Account

 

The RECEIPTS AND PAYMENTS ACCOUNT will record the subscriptions received during the accounting period.

 

The INCOME AND EXPENDITURE ACCOUNT will record the subscriptions that are due or relate to the particular accounting year.

 

This means the subscriptions received as recorded in the RECEIPTS AND PAYMENTS ACCOUNT will be adjusted for any prepayments

and accruals.

 

The effect from the above three statements, i.e. receipts being posted, prepayments and accruals being adjusted into the subscriptions

Account will then be transferred to the INCOME AND EXPENDITURE ACCOUNT.

 

The prepayments refers to the advance subscriptions received from members.

The accruals refers to the unpaid subscriptions which have fallen due tin the financial period.

 

 

 

Lifetime subscriptions

 

There are generally two treatments for lifetime subscriptions.

 

-          Lifetime Members Fund

 

It can be treated as lifetime members fund.

 

Its balance will be shown in the balance sheet.

 

It is posted to the Accumulated Fund Account when the member has deceased.

 

-          Lifetime Subscriptions Fund

It can be treated as lifetime subscriptions fund.

It is posted to the Income & Expenditure Account over a number of years

 

 

Entrance Fees

 

This can be treated as income in the Income & Expenditure Account or posted directly to the Accumulated Fund.

 

 

 

Donations

 

The amount received for donations are transferred directly into the Accumulated Fund Account.

 

 

 

Accumulated Fund Account

 

Is similar to Capital Account in the case of a trading or a company account. The Capital Account simply shows the

Funds belonging to the owner of the company.

 

 

Whereas in the case of accumulated fund for a non-trading account, the funds shows the amount belonging to the

members of the association.

IMPORTANT REMINDER

 

THIS IS TO PROVIDE STUDENTS A COURTESY REMINDER THAT THIS BLOG IS CATERED

TO HELP ACCOUNTANCY STUDENTS AT BASIC LEVEL TO GAIN A QUICK SUMMARY OF

MAJORLY ALL THE BASIC COMPONENTS OF THE BOOK-KEEPING AND ACCOUNTING STUDIES.

 

IT IS NOT MEANT TO PROVIDE A COMPLETE CONTENT OF THE SUBJECT MATTER.

 

THEREFORE, STUDENTS ARE ADVISED TO TAKE THIS INFORMATION RESOURCE AS A SUPPLEMENTARY READING ONLY.

 

THIS READING MATERIAL IS ONLY A SUMMARY OF WHAT IS ESSENTIAL IN GETTING  A GOOD

UNDERSTANDING BUT NOT AN EXHAUSTIVE ONE OF THE RELATED TOPIC.

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