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NON PROFIT MAKING ORGANISATIONS

1 The following information is for Rowa country club for the year ended 31 December.

1 January 31 December
$ $
Subscriptions in arrears 6 000 3 000
Subscriptions in advance 5 000 4 000
Cash received during the year for subscriptions was $150 000.

Which amount for membership subscriptions should be shown in the income and
expenditure account?

A $148 000

B $150 000

C $152 000

D $154 000

2 The following information relates to subscriptions by members of a football club.

1 July 2011 30 June 2012

$ $
Subscriptions in arrears 6 300 6 600
Subscriptions in advance 3 000 4 100

Subscriptions received during the year amounted to $90 000. Subscriptions in arrears
amounting to $1 000 were written off.

Which amount should be credited to the income and expenditure account for the year
ended 30 June 2012?
A $88 200
B $89 200
C $90 200
D $91 800

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3 Clubs should treat life membership subscriptions as

A additions to the accumulated fund.

B deferred income.
C income for the year in which they are received.
D loans to the club.

4 A club’s records provide the following information for the year ended 2010:

$
Accrued membership fees at 1 January 2010 135
Prepaid membership fees at 1 January 2010 150
Membership fees paid: 2009 75
2010 ?
2011 45

The club has 85 members and membership fees amount to $15 per month. The
outstanding fees for the year 2009 must be written off.

How much was received from members for the 2010?

A $15 015
B $15 150
C $15 210
D $15 300

5 How should clubs treat life membership subscriptions?

A credit the income and expenditure account in the year of receipt

B credit the life membership account in the year of receipt and transfer a
proportion each year to the income and expenditure account.
C debit the income and expenditure account in the year of receipt.
D debit the life membership account in the year of receipt and transfer a proportion
each year to the income and expenditure account.

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6 The following information relates to a club for a year.

Number of members 120

Annual subscriptions per member $20
Subscriptions owing at the beginning of the year $200
Subscriptions at the end of the year $120

How much should be credited to the income and expenditure account as annual
subscriptions?

A $2 080
B $2 320
C $2 400
D $2 520

7 A club’s income and expenditure account for 2014 showed rent receivable of $5 000.
On 1 January 2014, rent receivable owing was $500 and on 31 December 2014, rent
received in advance was $600.

What was the amount shown in the receipts and payments account for rent received for
the year ended 31 December 2014?
A $3 900
B $4 900
C $5 100
D $6 100

8 All of the following are income items in the income and expenditure account except

A equipment hire.

B hall hire.

C general donation.

D specific donation.

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9 The treasurer of Masimba golf club has supplied the following information for the year
ended 30 June 2017.

Balances at 30 June 2016 30 June 2017

Subscriptions due $2 000 $3 500
Subscriptions in advance $1 500 $2 300

Subscriptions received amounted to $24 000.

Subscriptions written off amounted to $1 800.

How much is the income from subscriptions for the year ended 30 June 2017?

A $24 000
B $24 700
C $25 100
D $26 500

10 KB football club receives a legacy of $100 000 as per the will of a donor.

How should this amount be treated in the organisation’s accounting records?

A debited to the receipts and payments account and credited the income and
expenditure account.

B credited to the receipts and payments account and debited the income and
expenditure account.

C debited to the receipts and payments account and credited to the capital fund
account.

D credited to the receipts and payments account and debited to the capital fund
account.

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11 A club invites a renowned speaker to deliver a lecture to its members and pays $1 000
as a token of appreciation for the speaker’s time and expertise.

How should the club account for this payment?

A debit the payment to the income and expenditure account as honorarium.

B credit the payment to the income and expenditure account as income.

C debit the payment to the capital fund account as capital expenditure.

D record the payment as a liability in the statement of financial position.

12 Life membership subscriptions are

A credited to the income and expenditure account with the total amount in the
year of receipt.

B credited to life membership fund with the total receipt and a proportion
transferred each year to the income and expenditure account.

C debited to the income and expenditure account with the total amount in the year
of receipt.

D debited to life membership fund with the total receipt and a proportion
transferred each year to the income and expenditure account.

13 A club receives $5 000 in entrance fees from new members. The entrance fee is a
one-time payment made by each member upon enrolment, and the club enrols new
members every year.

How should the club account for this?

A credit $5 000 to the capital fund account

B debit $5 000 to the income and expenditure account

C credit $5 000 to the income and expenditure account

D defer recognition of entrance fees until the member’s subscription period ends

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14 Which of the following will not be found in the accounts of a club?

A accumulated fund

B drawings account

C receipts and payments account

D statement of financial position

15 How are subscriptions received in advance treated in the final accounts of a club?

A As a liability in the statement of financial position.

B As an asset in the statement of financial position.

C As an expense in the income and expenditure account.

D As income in the income and expenditure account.

16 A club sells equipment to its members. The following information is available:

$
Opening inventory of equipment 3 900
Subscriptions received 30 000
Sales of equipment 21 000
Purchases of equipment 15 000
Closing inventory of equipment 2 400

What is the club’s income?

A $30 000

B $34 500

C $37 500

D $51 000

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17 The following information for the year is extracted from sports club’s accounts:

$
Subscription received 10 000
Sales of equipment to members 7 000
Opening inventory of equipment 1 300
Closing inventory of equipment 800
Purchases of equipment 5 000

What are the club’s surplus income over expenditure for the year?

A $10 000

B $11 500

C $12 500

D $17 000

18 Jambu sports club received a donation for building a new pavilion.

The donation should be recorded as

A a current asset.

B a non-current asset.

C a specific fund.

D income.

19 Tashinga Sports Club offers life membership for one lump-sum payment.

The balance in the life membership account is shown in the statement of financial
position as

A a current asset.

B accumulated fund.

C general reserve.

D long-term liability.

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20 The following balances are in respect of subscriptions receivable for a sports club.

1 January 2007 31 December 2007

$ $
Subscriptions owing 10 000 15 000
Subscriptions in advance 12 000 18 000

If $279 000 was income for the year, how much cash was received for the year ended
31 December 2017?

A $274 000

B $279 000

C $280 000

D $285 000

21 Any donation received by a club for specific purpose is

A credited to the donations special fund account.

B credited to the income and expenditure account.

C debited to the donations special fund account.

D debited to the income and expenditure account.

22 When preparing club accounts, the treatment of subscriptions in arrears as an asset

contravenes the

A accrual concept.

B consistency concept.

C materiality concept

D prudence concept.

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23 Muyamba Social Club had the following assets and liabilities as at 31 May 2010.

$
Buildings 40 000
Pool tables 3 000
10% Debentures (investments) 4 500
Bar supplies unpaid 6 400
Subscriptions in advance 400
Bank overdraft 2 500

What is the club’s accumulated fund?

A $32 200

B $38 200

C $39 200

D $43 200

24 A club’s bar inventories as at 1 January 2017 cost $4 750. During the year ended 31
December 2017, cash receipts from customers of $34 450 were banked. Staff wages of
$2 600 were paid from the till receipts. Bar purchases during the period were $26 200.
All of the bar prices are fixed to give a uniform gross profit percentage of 40%.

What is the net profit on bar trading shown in the club’s income and expenditure
account for 2017?

A $11 180

B $12 220

C $13 780

D $14 820

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25 A club’s records provide the following information for the year:

$
Annual subscriptions received for the year 4 000
Annual subscriptions received in advance at end of year 50
Balance on life subscriptions account at beginning of year 500
Life subscriptions received during the year 100
The club’s policy is to credit life subscriptions to the income and expenditure account
over five years.

How much should be credited to the Income and Expenditure Account for subscriptions
for the year?

A $4 050

B $4 070

C $4 150

D $4 170

26 A club’s surplus of income over expenditure for the year is represented by the

A balance in its accumulated fund at the year end.

B increase in net assets over the year.

C increase in its total assets over the year.

D increase in the balance of the receipts and payments account over the year.

27 A donation to a writer’s association intended for the extension of the association’s

building should be shown in the statement of financial position as

A a current liability.

B a non-current asset

C a special fund.

D an increase in the accumulated fund.

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28 The following items are included in the income and expenditure account except

A a portion of life membership fee.

B donation for future skills development.

C net profit from bar sales

D part of cost of equipment bought many years back.

29 Receipts and payments is one in which

A the opening and closing cash balances are shown.

B the profit is calculated.

C the surplus of income over expenditure is calculated.

D is accompanied by a statement of financial position.

30 The information about subscriptions in the books of a social club is given below:

$
Subscriptions due on 1 January 2013 3 000
Subscriptions in advance on 1 January 2013 2 340
Subscriptions received during the year 15 670
Subscriptions due on 31 December 2013 340

What is the income credited to the income and expenditure account for the year?

A $15 350

B $15 990

C $16 670

D $18 350

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31 A social club whose year ends on 31 December receives an annual donation from a
company based on 50% of total membership fees due in that year. This donation s paid
on 28 March of the following year.

The following is provided:

$
Subscriptions received in Year 1 2 940
2 3 180
Subscriptions outstanding in Year 1 60
2 70

How much should be recorded in the income and expenditure account in Year 2?

A $3 190

B $4 500

C $4 690

D $4 785

32 During the year ended 31 December 2017, Dumela sports club received $12 000 for
subscriptions. The following information is available for the year ended:

2016 2017
$ $
Subscriptions owing 600 800
Subscriptions received in advance 1 600 1 200

What is the figure for subscriptions in the income and expenditure account for the year
ended 31 December 2017?

A $13 400

B $12 600

C $11 400

D $10 600

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33 The following information is for Tindo Sports Club for the year ended 31 December
2016.

1 January 2016 31 December 2016

$ $
Subscriptions owing 550 650
Subscriptions received in advance 1 500 1 400

During the year the club received $15 000 for subscriptions.

What is the amount for subscriptions in the income and expenditure account for the
year ended 31 December 2016?

A $13 300

B $14 800

C $15 000

D $15 200

34 A donation to a Young People’s Sports and Recreational club to help build a new
pavilion is shown as

A a special fund in the statement of financial position.

B an addition to the accumulated fund.

C an asset in the statement of financial position.

D income in the income and expenditure account.

35 If a club incurs excess of expenditure over income for the year, this is represented by

A balance of its accumulated fund at the year end.

B increase its total assets over the year.

C reduction in its assets over the year.

D reduction in the balance of receipts and payments account for the year.

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36 The following information relates to Tamitami sports club for the year.

The book values and fair values of the sole trader are shown below,

1 January 31 December
$ $
Subscriptions owing 20 000 15 000
Subscriptions in advance 50 000 60 000
Subscriptions received 300 000

How much should be credited to the income and expenditure account?

A $260 000

B $285 000

C $315 000

D $375 000

37 Life membership subscription should be

A credited to the income and expenditure account in the year of receipt.

B debited to the income and expenditure account in the year of receipt.

C credited to the life membership fund in the year of receipt and a proportion
transferred to the income and expenditure account.

D debited to the life membership fund in the year of receipt and a proportion
transferred to the income and expenditure account.

38 Which one of the following will an income and expenditure account of a club show?

A Accumulated fund

B Deficit or surplus

C income and expenses

D Receipts and payments

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39 The following information relates to a club for the year ended 31 December 2020.

1 January 31 December
$ $
Subscriptions in arrears 8 200 7 200
Subscriptions in advance 3 800 3 000

Subscriptions received during the year was $72 000.

Subscriptions for the year will be

A $71 800

B $72 000

C $72 200

D $80 600

40 A club has 100 members who pay $6 annual subscription each. At the end of a year, 4
members had not paid their annual subscriptions.

What will be the entries for subscriptions in the financial statements?

Statement of financial position Income and expenditure account

A current assets $24 income $576

B current assets $24 income $600

C current liabilities $24 income $576

D current liabilities $24 income $600

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