How to prepare the Subscriptions Account

Accounting for Clubs and Societies

What you need

• The annual subscription rate per member and the club's financial year-end date.
• The opening balances of subscriptions in arrears and subscriptions in advance.
• The total subscriptions received through the bank or in cash during the year.
• Details of subscriptions in arrears, in advance and written off at the year-end.

Step by step

1. 1

   Identify the subscription items and opening balances

   Gather all subscription information from the society's records. Example: Kelab Rekreasi Setia sets an annual subscription of RM50 per member and its financial year ends on 31 December 2025. On 1 January 2025 there were subscriptions in arrears of RM300 (six members had not paid their 2024 subscriptions) and subscriptions in advance of RM150 (three members had paid early for 2025). During 2025, subscriptions received through the bank totalled RM4,500. On 31 December 2025 subscriptions in arrears were RM200 and subscriptions in advance for 2026 were RM100, while subscriptions written off were RM100.

2. 2

   Open the Subscriptions Account and record the opening balances

   Open a T-account titled Subscriptions Account. Subscriptions in arrears are an asset because members owe the club, so this is recorded on the debit side as Balance b/d RM300. Subscriptions in advance are a liability because the club still owes service to members, so this is recorded on the credit side as Balance b/d RM150.

3. 3

   Record subscriptions received during the year

   All subscription money received is credited in the Subscriptions Account. The double entry is: Debit Bank RM4,500; Credit Subscriptions Account RM4,500. The credit reduces what members owe, while the debit to Bank increases the club's cash.

4. 4

   Write off bad subscriptions

   Subscriptions in arrears that can no longer be collected (for example, from members who have left) must be written off. The double entry is: Debit Subscriptions Written Off RM100; Credit Subscriptions Account RM100. The RM100 credit in the Subscriptions Account cancels the uncollectible debt, while Subscriptions Written Off RM100 is shown as an expense on the debit side of the Income and Expenditure Account.

5. 5

   Record the closing balances (Balance c/d)

   Subscriptions in arrears at year-end of RM200 are recorded on the credit side as Balance c/d RM200, then brought down to the debit side as an asset for the following year. Subscriptions in advance at year-end of RM100 are recorded on the debit side as Balance c/d RM100, then brought down to the credit side as a liability for the following year.

6. 6

   Balance the account and transfer the subscription income

   Total both sides to find the current-year subscription income as the balancing figure. The credit side = RM150 + RM4,500 + RM100 + RM200 = RM4,950. The known debit side = RM300 + RM100 = RM400. The balancing figure (2025 subscription income) = RM4,950 − RM400 = RM4,550. Record this on the debit side as Income and Expenditure Account RM4,550, and both sides now total RM4,950.

7. 7

   Present in the final statements

   Transfer the subscription income of RM4,550 to the income (credit) side of the Income and Expenditure Account for the year ended 31 December 2025, and show Subscriptions Written Off RM100 on the expenditure (debit) side of the same statement. In the Statement of Financial Position as at 31 December 2025, record subscriptions in arrears RM200 under Current Assets and subscriptions in advance RM100 under Current Liabilities.

Second example

Kelab Badminton Harmoni sets a subscription of RM60 a year and closes its accounts on 31 December 2025. On 1 January 2025 subscriptions in arrears were RM240 (four members). During the year the club received RM3,600 through the bank, including RM120 paid early for 2026. On 31 December 2025 subscriptions in arrears were RM180 and there were no subscriptions written off.

In the Subscriptions Account, record Balance b/d RM240 on the debit side and Balance c/d for subscriptions in advance RM120 on the debit side; on the credit side record Bank RM3,600 and Balance c/d for subscriptions in arrears RM180. The credit total of RM3,780 less the known debit of RM360 gives subscription income of RM3,420, which is transferred to the income side of the Income and Expenditure Account. In the Statement of Financial Position, subscriptions in arrears RM180 are a Current Asset while subscriptions in advance RM120 are a Current Liability.

Common mistakes

Related chapter: Accounting for Clubs and Societies →

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