Financial Reporting
Clubs and Societies
Clubs and societies are non-profit organisations. Questions focus on preparing the Receipts and Payments account, the Income and Expenditure account (not a profit and loss account), and the accumulated fund — applying accruals and prepayments in the same way as commercial entities.
The most common error is confusing the Receipts and Payments account (a cash summary) with the Income and Expenditure account (an accruals-based statement). Always convert cash receipts and payments to income and expenditure by adjusting for accruals, prepayments, subscriptions in arrears/advance, and depreciation. The surplus or deficit transfers to the Accumulated Fund — not retained earnings.
Key Concepts to Revise
Receipts & Payments Account
A simple cash summary — all cash/bank inflows and outflows for the period
Opening balance + Receipts − Payments = Closing balance. No accruals applied here.
Income & Expenditure Account
The equivalent of a profit and loss account — prepared on an accruals basis
Results in a surplus (income > expenditure) or deficit (expenditure > income)
Subscriptions
Adjust cash subscriptions received for arrears (owed) and advance (prepaid) members
Income from subscriptions = Cash received + Closing arrears − Opening arrears − Closing advance + Opening advance
Accumulated Fund
The non-profit equivalent of capital — represents the net assets of the club
Opening accumulated fund ± Surplus/Deficit = Closing accumulated fund. Shown in the Statement of Financial Position.
Trading Activities
Many clubs run a bar, shop, or refreshments — prepare a separate trading account for these
Net profit from trading is transferred as a single figure into the Income and Expenditure account
Life Membership & Donations
Life membership fees are spread over the estimated membership period — not taken as income in full in year received
Donations for specific purposes (restricted funds) must be kept separate from general income