IGC-L23 — Clubs & Societies Accounts
Understanding how non-profit organisations record income and expenditure and determine surplus or deficit.
Learning Objectives
- define clubs and societies as non-profit organisations
- distinguish between receipts and payments account and income and expenditure account
- calculate surplus or deficit
- account for subscriptions correctly
- understand accumulated fund
Concept Framework
What are Clubs & Societies?
Clubs and societies are non-profit organisations.
Their objective is not to earn profit, but to provide services to members.
Examples include:
• sports clubs
• cultural societies
• social organisations
Key Objective
Instead of profit, these organisations determine:
Deficit (if expenditure > income)
Receipts and Payments Account
This is a summary of cash transactions.
Features:
• records all cash received and paid
• includes capital and revenue items
• not prepared on accrual basis
Income and Expenditure Account
This is similar to an Income Statement.
Features:
• prepared on accrual basis
• includes only revenue items
• used to calculate surplus or deficit
Diagram 1 —Flow of Accounts
Receipts & Payments Account
↓
Adjust for accruals and prepayments
↓
Income & Expenditure Account
↓
Surplus / Deficit
↓
Added to / deducted from Accumulated Fund
Accumulated Fund
Accumulated fund is equivalent to capital in a non-profit organisation.
Diagram 2 — Subscriptions Adjustment
They must be adjusted as follows:
+ Outstanding subscriptions (accrued)
− Subscriptions received in advance
= Subscription income
Worked Examples
Subscriptions received = £10,000
Outstanding subscriptions = £1,200
Subscriptions in advance = £800
Subscription income:
10,000 + 1,200 − 800 = £10,400
📌 Additional structured questions on clubs and societies are available in the
🎯 Lesson wise resources, Module wise resources, Guess Question Papers + YouTube Explanation section.
Students should practise subscription adjustments regularly.
Structured Practice
Level 1 – Concept Check
Define a non-profit organisation.
What is surplus?
State one feature of receipts and payments account.
Level 2 – Application Practice
Subscriptions received = £8,000
Outstanding = £1,000
Advance = £500
Calculate subscription income.
Level 3 – Examination Style Question
Explain the difference between receipts and payments account and income and expenditure account.
(4 marks)
📌 Additional structured Statement of Financial Position questions are available in the 🎯 Lesson wise resources, Module wise resources, Guess Question Papers + YouTube Explanation section.
Enrolled students may submit questions from recognised textbooks, past examination papers or other genuine academic material for expert clarification through the Student Doubt Support facility.
Proficiency Check
Learn → Unlearn → Relearn
Students who believe they understand this topic should attempt:
- Explain why receipts and payments account is not suitable for calculating surplus.
Subscriptions received = £12,000
Outstanding = £2,000
Advance = £1,000Calculate subscription income.
- Explain the role of accumulated fund.
If unsure, review the lesson.
Detailed Activity Solutions
Solution to Level 2 question
8,000 + 1,000 − 500 = £8,500
Solutions to Proficiency Check
12,000 + 2,000 − 1,000 = £13,000
How This Topic Appears in the Examination
This topic commonly appears through:
• subscription adjustments
• preparation of income and expenditure account
• explanation questions on differences between accounts
Examiners frequently assess:
• correct adjustments
• understanding of accruals
• correct calculation of surplus
Students should practise regularly and review video explanations for clarity.
Enrolled students may submit questions from recognised textbooks, past examination papers or other genuine academic material for expert clarification through the Student Doubt Support facility.
Self-Assessment Checklist
- I understand non-profit organisations
- I can calculate subscription income
- I understand surplus and deficit
- I understand accumulated fund
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