Accounting For Clubs & Societies

1. Learning Outcomes: Understand the concept of clubs & societies Know the accounting requirements of a club and societies. Able to prepare financial statements for club and societies Accounting For Clubs & Societies

2. Societies Act 1966 Clubs and societies are non-business entity registered under the Societies Act 1966. The purpose is not for profit but to promote and cater for the members’ interests and welfare. Also provide service to clubs’ members. E.g. sports clubs, social clubs, staff associations. Introduction

3. Comparison between businesses and clubs/societies

4. Cont.

5. Sources of Income

6. Cont. Expenditures: • Rental of club house • Purchases of newspapers and magazines • Purchases of sports equipment • Honorarium • Workshops and trainings • Visits • Expenses for meetings

7. Differences in Term

8. Subscriptions are paid by members as charges for using the facilities of a club or society for a particular period of time (usually in yearly basis). Subscriptions fees: Entrance fee Annual fee Tournament fee In order to post it to the Income and Expenditure accounts, adjustments have to be made to the subscription. That is, subscription only pertaining to that particular year is recorded in Income/Expenditure accounts. Subscription accounts

9. Receipt & Payment Account • Is a summary of the cashbook for the period under review. • A summary of cash and cheques received and paid. • It does not use accrual basis in accounting. • Receipts are recorded at debit side and payments are recorded at credit side of the account. • If at the end of the accounting period, balances in debit side indicate as cash in hand (B/S) and balances in credit side indicate overdraft (B/S).

10. Cont. • R/P accounts maybe suitable for very small clubs and societies with mainly have cash and bank balances. • Thus, for larger clubs and societies usually prepare and income and expenditure accounts.

11. Income & Expenditure Account • The preparation of the account is similar to P&L Account for businesses. • Accrual basis – year end adjustments are necessary. • Surplus = Profit • Deficit = Loss

12. Trading Account • It is necessary if the club runs trading operation such as canteen. • The profit/loss obtained from the trading is posted to Income & Expenditure Account. • Relevant information: • Opening and closing stocks • Purchases (Cash and credit) • Sales (Cash and credit) • Expenses for operating the trade (e.g. canteen)

13. Balance Sheet • To record all assets, liabilities and accumulated funds. • The presentation is similar as BS for businesses except for the owners’ equity. • Owners’ equity = Accumulated fund • Assets = Accumulated funds + Liabilities