Level: Easy
Easy Worked Examples: Accounting for Clubs and Societies
Six easy, graded examples for Form 5 Chapter 6, covering the Receipts and Payments Account, Subscriptions Account, activity Trading Account, Income and Expenditure Account and the Accumulated Fund, using small round RM figures.
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Example 1: Receipts and Payments Account (T-form)
Question
Solution plan
The Receipts and Payments Account summarises actual cash. All money IN (opening cash, subscriptions, donations) goes on the DEBIT side. All money OUT (rent, equipment) goes on the CREDIT side. The closing cash balance (c/d) is the balancing figure on the credit side, and is then brought down as balance b/d on the debit side.
| Particulars | RM (Debit) | Particulars | RM (Credit) |
|---|---|---|---|
| Balance b/d | 500 | Hall rent | 400 |
| Members' subscriptions | 1,200 | Sports equipment expenses | 200 |
| Donations | 300 | Balance c/d | 1,400 |
| 2,000 | 2,000 | ||
| Balance b/d | 1,400 |
Answer
Both sides of the account total RM2,000. Cash at bank on 31 December 2024 (balance c/d) is RM1,400.
Where marks are usually lost
Example 2: Subscriptions Account (current year only)
Question
Solution plan
Subscriptions received through the bank are recorded on the CREDIT side of the Subscriptions Account (the other account is Bank). Because there are no arrears or advances, the full RM2,400 is entered on the DEBIT side as the transfer to the Income and Expenditure Account. Check: 40 members x RM60 = RM2,400.
| Particulars | RM (Debit) | Particulars | RM (Credit) |
|---|---|---|---|
| Income and Expenditure | 2,400 | Bank | 2,400 |
| 2,400 | 2,400 |
Answer
Members' subscriptions for 2024 amount to RM2,400 and this figure is transferred to the credit of the Income and Expenditure Account as revenue.
Where marks are usually lost
Example 3: Subscriptions Account (with subscriptions in arrears)
Question
Solution plan
Subscriptions received (Bank) of RM4,000 go on the CREDIT side. The RM500 in arrears is an ASSET (members owe it), so it is entered as balance c/d on the credit side and brought down as balance b/d on the debit side. This year's subscriptions = received + closing arrears = RM4,000 + RM500 = RM4,500, the balancing figure on the debit side, which is transferred to the Income and Expenditure Account.
| Particulars | RM (Debit) | Particulars | RM (Credit) |
|---|---|---|---|
| Income and Expenditure | 4,500 | Bank | 4,000 |
| Balance c/d (arrears) | 500 | ||
| 4,500 | 4,500 | ||
| Balance b/d (arrears) | 500 |
Answer
Members' subscriptions for 2024 amount to RM4,500 (transferred to the Income and Expenditure Account). Subscriptions in arrears of RM500 are brought down as balance b/d and shown as a current asset in the Statement of Financial Position.
Where marks are usually lost
Example 4: Trading Account of a club activity (drinks sales)
Question
Solution plan
Cost of sales = Opening stock + Purchases - Closing stock = 0 + 500 - 100 = RM400. Gross profit = Sales - Cost of sales = 900 - 400 = RM500. In 'T' form: Purchases and gross profit c/d on the DEBIT; Sales and closing stock on the CREDIT.
| Particulars | RM (Debit) | Particulars | RM (Credit) |
|---|---|---|---|
| Purchases | 500 | Sales | 900 |
| Gross profit c/d | 500 | Closing stock | 100 |
| 1,000 | 1,000 | ||
| Gross profit b/d | 500 |
Answer
The cost of drinks sold is RM400 and the gross profit from the drinks activity is RM500. This gross profit is transferred to the credit of the Income and Expenditure Account as revenue.
Where marks are usually lost
Example 5: Income and Expenditure Account (surplus)
Question
Solution plan
The Income and Expenditure Account is like a Profit and Loss Account. All REVENUE goes on the CREDIT side; all EXPENSES on the DEBIT side. Total revenue = 3,000 + 500 + 100 = RM3,600. Total expenses = 1,200 + 800 + 400 + 200 = RM2,600. Since revenue > expenses, there is a SURPLUS = 3,600 - 2,600 = RM1,000 entered on the debit side as the balancing figure.
| Expenditure | RM (Debit) | Income | RM (Credit) |
|---|---|---|---|
| Rent | 1,200 | Members' subscriptions | 3,000 |
| Supervisor's salary | 800 | Profit on sale of souvenirs | 500 |
| General expenses | 400 | Bank interest | 100 |
| Depreciation of furniture | 200 | ||
| Surplus of income over expenditure | 1,000 | ||
| 3,600 | 3,600 |
Answer
Total revenue RM3,600 and total expenses RM2,600 give a SURPLUS of income over expenditure of RM1,000. This surplus is added to the Accumulated Fund.
Where marks are usually lost
Example 6: Computing the Accumulated Fund
Question
Solution plan
The Accumulated Fund is equivalent to the Owner's Equity of a profit-oriented entity. Formula: Accumulated Fund = Total Assets - Total Liabilities. Total assets = 4,000 + 1,500 + 300 = RM5,800. Total liabilities = RM800. Accumulated Fund = 5,800 - 800 = RM5,000.
| Particulars | RM | RM |
|---|---|---|
| Assets | ||
| Furniture | 4,000 | |
| Bank balance | 1,500 | |
| Souvenir stock | 300 | |
| Total Assets | 5,800 | |
| Less: Liabilities | ||
| Creditors | 800 | |
| Total Liabilities | 800 | |
| Accumulated Fund | 5,000 |
Answer
The Accumulated Fund of Kelab Catur Sri Aman on 1 January 2024 is RM5,000, being total assets RM5,800 less total liabilities RM800.
Where marks are usually lost
Other sets for this chapter
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