Financial Statements
Clubs & Societies
Questions require you to prepare a Receipts and Payments account, an Income and Expenditure account, and a statement of financial position for a non-profit organisation. The key skill is converting cash-based receipts and payments into an accruals-based income and expenditure account.
The Receipts and Payments account is simply a cash book — no adjustments. The Income and Expenditure account works like an income statement but uses accruals. Common mistakes: including capital receipts (e.g. sale of assets) in income, and forgetting to adjust subscriptions for amounts in advance or in arrears.
Key Concepts to Revise
Receipts & Payments
A simple cash summary — all cash received (debit) and all cash paid (credit). No accruals adjustments. Opening and closing cash balances included.
Income & Expenditure
The non-profit equivalent of an income statement. Uses accruals — adjust subscriptions, expenses in advance/arrears. Surplus = income exceeds expenditure.
Subscriptions
Adjust for arrears (add to income, current asset) and advance payments (deduct from income, current liability). A subscription account is often required.
Accumulated Fund
The non-profit equivalent of capital. Opening accumulated fund + surplus for the year = closing accumulated fund shown in the SFP.