1. 1 Accounting For Clubs & Societies 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

2. 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. 3 Comparison between businesses and clubs/societies BusinessesClubs and Societies Set up to earn profit by selling goods and services To promotes activities of interests to its members Financed by owners’ equityFinanced by monthly or yearly subscriptions from members Money received and paid are recorded in cash book Money received/paid are recorded in receipts and payments accounts Trading account: Sales revenue – cost of sales Trading account (e.g. canteen): Trading revenue – trading expenses Revenues: Sales or fees received Income: Subscriptions from members

4. 4 Cont. BusinessesClubs and Societies Profit and Loss account = profit/loss Income and expenditure account = surplus/deficit Balance sheet: Assets = Owners’ Equity + Liabilities Balance sheet: Assets = Accumulated fund + Liabilities

5. 5 Sources of Income BusinessesClubs and Societies Sale of goodsSubscriptions Receipts from servicesEntrance fees Rent receivedProfit from sale of refreshments Discount receivedProfit from activities Interest received Profits on disposalDonations

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

7. 7 Differences in Term BusinessesClubs /SocietiesComment Profit & Loss Account Income & expenditureThese differences reflect the fact that clubs & societies are not profit- oriented Cash accountReceipts & Payment a/cSame as above Net profit/LossSurplus/DeficitIf using accrual basis, apply the treatment as businesses CapitalAccumulated fundCapital does not exist in club/societies. If a member resigns, no right to reclaim fee

8. 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.  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). Receipt & Payment Account

10.  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. Cont.

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

12.  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) Trading Account

13.  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 Balance Sheet