Theory question 103
Not-for-Profit Organisations(a) Explain the following terms as used in account of not-for-profit making organization. (i) entrance fees (ii) subscription
(b) State five features of income and expenditure account
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(a)(i) Entrance fees: a once-only payment made by a new member on joining the club; treated as income or capitalised as the club's policy states.
(ii) Subscription: the regular (usually yearly) fee members pay to remain members; income of the period it relates to.
(b) Any five: it is a nominal account like profit and loss; prepared on an accruals basis; records only revenue items; income on the credit side and expenditure on the debit side; balance is a surplus or deficit transferred to the accumulated fund; has no opening balance; prepared periodically (at year end).
Define both receipts, then list features of the income and expenditure account.