Clubs

Question 1

Define club

Answer 1

Non-trading organisations formed to provide facilities and services for members

Question 2

Define subscriptions

Answer 2

Amounts members pay to use the service provided by the club

Question 3

Describe the receipts and payments account (and layout).

Answer 3

Summary of the cash book
No adjustments are made for accruals and prepayments
No distinction between capital and income receipts/expenditure
Non-monetary items are not included

Layout:

DEBIT: - this is the receipts side
Balance b/d
Subscriptions
Entrance fees

CREDIT: - this is the payments side
Rates
General expenses
Equipment
Balance c/d

Question 4

What is the layout of the subscriptions ledger?

Answer 4

DEBIT:
Balance b/d - Accrued at start
Income and expenditure - amount that should be received for the year
Balance c/d - Prepaid at end

CREDIT:
Balance b/d - Prepaid at start
Bank
Balance c/d - Accrued at end

Question 5

What is the layout of the income statement of a club?

Answer 5

Revenue
Less: Cost of Sales
Opening inventory
+ Purchases
- Closing inventory
+ Wages of shop assistant
+ Machinery
= Profit <- Transfer to income and expenditure account

Question 6

What is the layout of the income and expenditure account?

Answer 6

Income

Subscriptions
Profit
Competition: entry fees
Prizes

Expenses

Wages
Rates
Rent
Surplus for the year

All rules of an income statement are applied:
Prepaid/Accrued
Capital/Revenue income/expenditure

Question 7

What is the layout for the statement of financial position of a club?

Answer 7

Assets (same as sole trader)
Accrued subscriptions = current asset

Accumulated fund and liabilities
Liabilities (same as sole trader)
Prepaid subscriptions = current liability

Accumulated fund

Opening balance (assets - liabilities at start of year)
+ Surplus for the year