Club Accounts Flashcards
What is a levy & how is it treated in the accounts?
levy - payment made to a club by its members to fund a special project such as a clubhouse extension. It must be used for the purpose for which it is collected
• capital receipt - credited to reserve fund
• due to members, long term liability in balance sheet
What is a life membership & how is it treated in the accounts?
Life membership - club member pays a fee that entitles them to use the facilities of the club for the rest of their life
• long term liability in balance sheet, can be written off as income over stated number of years
What are subscriptions & how are they treated in the accounts?
Subscriptions - fee paid each year by the members to the club for the day to day running of the club
- income & expenditure account
What is meant by a special purpose profit and loss account?
Sometimes non-profit making organisations such as a club prepare a profit and loss account for activities that are carried out to make profit
For example, bar / restaurant
What is a receipts and payments account?
The cash book of a club which shows the opening cash/bank balance, all money coming in and going out, and the closing cash/bank balance, must be recorded by club treasurer
What are the limitations of a receipts and payments account?
- it does not shows whether the club is raising enough funds to cover its running costs
- it does not take into account losses such as depreciation
- it does not show whether the club bar/restaurant if profitable
- it does not distinguish between receipts for the current year and other years
What are the differences between the income and expenditure account and the receipts and payments account?
- the income and expenditure account does not show any activities that are not normal day to day club activities e.g. purchase of fixed asset
- figures entered into the income and expenditure account must take account of all prepayments and amounts due
What are the duties of a Club Treasurer?
- collections of subscriptions and other outstanding funds
- making payments for day to day running costs
- ## making regular lodgements to bank
What advice would you give to the club treasurer to improve financial position?
• catering/lotto would need to be looked at, it should not be maintained if making a loss
• the bank balance of € could be invested in a special terms deposit account to yield a greater return