5.4 Clubs and Societies

2026 Syllabus Objectives

By the end of this topic, you should be able to:

  1. Distinguish between receipts and payments accounts and income and expenditure accounts
  2. Prepare receipts and payments accounts
  3. Prepare accounts for revenue-generating activities (e.g. refreshments, subscriptions)
  4. Prepare income and expenditure accounts and statements of financial position
  5. Make adjustments to financial statements (accruals, prepayments, depreciation)
  6. Define and calculate the accumulated fund

1. What Are Clubs and Societies?

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Clubs and societies are called non-profit organisations (NPOs). This means their main aim is not to make a profit. Instead, they exist to provide services or facilities to their members. Examples include sports clubs, knitting clubs, and chess societies.

Because they are not profit-driven, clubs and societies use different accounting language:

  • Instead of profit, they say surplus (when income is greater than expenses)
  • Instead of loss, they say deficit (when expenses are greater than income)
  • Instead of capital, they say accumulated fund

Sources of Income for Clubs and Societies

  • Subscriptions — membership fees paid by members
  • Donations
  • Grants
  • Life memberships
  • Revenue from events or trading activities (e.g. selling refreshments)

Common Expenses

  • Wages
  • Rent
  • Insurance
  • Advertising
  • General expenses
  • Depreciation of equipment

2. Financial Statements Prepared by Clubs and Societies

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Clubs and societies typically prepare the following financial records:

  1. Receipts and Payments Account — a simple record of cash coming in and going out
  2. Subscriptions Account — calculates the correct subscription income for the year
  3. Income and Expenditure Account — similar to an income statement; shows surplus or deficit
  4. Trading/Income Statement for trading activities — e.g. a club café or shop
  5. Statement of Financial Position — shows assets, liabilities, and the accumulated fund

3. The Receipts and Payments Account

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What Is It?

A receipts and payments account is basically a simple cash book. It records every amount of money that comes into the club (receipts) and every amount that goes out (payments). It does not separate cash from bank — everything is combined.

Key Features

  • Money received → recorded on the debit (left) side
  • Money paid out → recorded on the credit (right) side
  • It includes all transactions — whether they are for long-term assets (like buying equipment) or day-to-day expenses
  • It does not make adjustments for amounts owed or paid in advance (no accruals or prepayments)
  • The closing balance represents the cash or bank balance remaining at the end of the year

Layout of a Receipts and Payments Account

Receipts and Payments Account
DateDetails (Receipts)USDDetails (Payments)
Opening dateBalance b/d (opening bank balance)xPurchases of equipment
Subscriptions receivedxWages
Refreshment salesxRent and rates
Fees receivedxGeneral expenses
Other incomexEvent expenses
Purchases of refreshments
Balance c/d (closing balance)
TOTALxxTOTAL
Next yearBalance b/dx

Example

The Old Mill Golfing Club had USD 4,120 in the bank on 1 June 2023. During the year ended 31 May 2024, the following took place:

ItemUSD
Subscriptions received66,400
Shop sales revenue8,350
Rental income from golf carts5,200
Purchases of golfing equipment for resale4,980
Wages44,700
General expenses5,100
Purchase of golf carts14,400

Step 1: Label each item as a receipt (money in = debit) or a payment (money out = credit).

ItemClassification
Subscriptions receivedDebit (Receipt)
Shop salesDebit (Receipt)
Rental incomeDebit (Receipt)
Golfing equipment purchasesCredit (Payment)
WagesCredit (Payment)
General expensesCredit (Payment)
Golf carts purchaseCredit (Payment)

Step 2: Prepare the account.

The Old Mill Golfing Club — Receipts and Payments Account for year ended 31 May 2024
DetailsUSDDetailsUSD
Balance b/d4,120Shop purchases4,980
Subscriptions66,400Wages44,700
Shop sales8,350General expenses5,100
Rental income5,200Golf carts purchase14,400
Balance c/d14,890
Total84,070Total84,070
Balance b/d14,890

The closing balance of USD 14,890 is the cash/bank balance at the end of the year.

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