Accounts of Clubs And Societies

The annual statement of the financial affairs of societies and other non-profit-making organisations takes a form very similar to that of the personal income and expenditure account and balance sheet described above. Exactly the same principles are followed of distinguishing between capital receipts and payments, which will be reflected in the statement of liabilities and assets (the balance sheet), and revenue receipts and expenditure which will form the basis of the income and expenditure account.

An added refinement is that, where revenue receipts and payments relate to a succeeding or preceding period to the one under review, they should be excluded, and suitable entries made in the balance sheet. Similarly, where amounts due to be received or paid in the current period are not so received or paid they should be included, and provision made in the balance sheet.

Example

The Gavin Sports Club was founded one year ago by a donation from Gavin Engineering Ltd of a cash sum of £15,000 and a wooden pavilion valued at £1l,000, together with a 20-year lease of a playing field at an annual rental of £1250. The following transactions took place in the following 12 months.

Paid for construction of tennis court l,020

Wages to part-time groundsman l,200

Paid ground rent 3751

Bought furniture and fittings l,400

Cost of printing, stationery, and postage 1352

Received subscriptions 1,4003

Received proceeds of concert 440

Transferred cash to bank deposit account l,500

Earned interest on deposit account 230

Bought mowing equipment 4704

Notes:

1. This includes £1125 ground rent for the succeeding year, paid in advance.

2. This includes £115 worth of headed paper held for stock.

3. Subscriptions due but not received amount to £13028 and of course are not included in the £11,400.

4. Of the sum of £1470 an amount of £1127 is still owed to Garden Equipment Ltd for a small mower for which no account has yet been received.

Using the basic information given above, one can draw up an income and expenditure account for the first year's operations, and a balance sheet showing the liabilities and assets at the end of that year, and this is shown overleaf. Depreciation has been written off at 10% a year on the value of the pavilion and tennis court, and at 20% on furniture, fittings and equipment.


Income And Expenditure Account

Expenditure £1 Income

Board and lodging 624 Net take-home pay 2,380

Fares to work 290 Building society

Midday meals 200 interest 32

Clothing 210

Holiday 160

Running expenses of

motorbike 130

Depreciation of

assets 103

Unidentified

spending 143

1,860

Balance, being excess of income

over spending 552

2,412 2,412

... see: Income And Expenditure Account


Refunds, Personal And Business Finance 2017

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