5.4 Clubs and societies

  

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Clubs and societies

What is a non profit making organisation?

An organisation formed by groups of individuals to pursue a common not-for-profit goal. It exists with the intention of distributing its revenue to achieve its purpose or mission.

Receipts and Payments Accounts:

Definition: A summary of cash receipts and payments during a specific period, usually prepared by non-profit organizations.

Receipts: All money received (e.g., donations, membership fees).

Payments: All money paid out (e.g., salaries, utilities).

Key Characteristics:

• Does not distinguish between capital and revenue items.
• No adjustments for accruals or prepayments.
• Simple and straightforward, providing a summary of cash flow.

Income and Expenditure Accounts:

Definition: A summary of income and expenses for a specific period, reflecting the organization’s performance.

It is basically an accrual-based accounting method. It records both cash and credit transactions

Income: Revenue earned (e.g., ticket sales, service fees).

Expenditure: Costs incurred (e.g., rent, utilities).

Key Characteristics:

• Records both cash and credit transactions.
• Distinguishes between capital and revenue items.
• Includes adjustments for accruals, prepayments, depreciation, and bad debts.
• Provides a true picture of the financial performance

Accumulated fund

Definition: The capital account of a club or non­profit-making organisation

Example:

Subscriptions Account

Definition: subscriptions account the account which records the membership fees of a member of a club 

Example:

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