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    Receipts and Payments

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    강준구
    The document discusses accounting for non-profit organizations, including how to prepare receipts and payments accounts, income and expenditure accounts, and statements of financial position. It also covers topics like accounting for subscriptions, donations, and life memberships.

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    © All Rights Reserved
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    Receipts and Payments

    Uploaded by

    강준구
    69 views23 pages
    The document discusses accounting for non-profit organizations, including how to prepare receipts and payments accounts, income and expenditure accounts, and statements of financial position. It also covers topics like accounting for subscriptions, donations, and life memberships.

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    receipts and payments

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    The document discusses accounting for non-profit organizations, including how to prepare receipts and payments accounts, income and expenditure accounts, and statements of financial position. It also covers topics like accounting for subscriptions, donations, and life memberships.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    69 views23 pages

    Receipts and Payments

    Uploaded by

    강준구
    The document discusses accounting for non-profit organizations, including how to prepare receipts and payments accounts, income and expenditure accounts, and statements of financial position. It also covers topics like accounting for subscriptions, donations, and life memberships.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 23

    Slide 36.

    Chapter 36
    Receipts and payments accounts
    and income and expenditure
    accounts

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.2

    Learning objectives
    After you have studied this chapter, you
    should be able to:

     Explain the main differences between the


    financial statements of non-profit-oriented
    organisations and those of profit-oriented
    organisations
     Prepare receipts and payments account

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.3

    Learning objectives (Continued)


     Prepare income and expenditure accounts
    and statements of financial position for
    non-profit-oriented organisations
     Calculate profits and losses from special
    activities and incorporate them into the
    financial statements
     Make appropriate entries relating to
    subscriptions, life membership and
    donations
    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.4

    Non-profit-oriented organisations
     When an accountant talks about non-
    profit-oriented organisations, they mean
    charities, clubs and associations.
     These are organisations run for the benefit
    of their members.
     Rather than producing income statements,
    they prepare receipts and payments
    accounts.

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.5

    Receipts and payments accounts


     Receiptsand payments accounts are a
    summary of the cash book for the period.
     They can reveal everything that has
    happened financially during the period.

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.6

    A receipts and payments account

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.7

    Income and expenditure accounts


    Where there are assets and/or liabilities within
    the organisation, the following statements are
    also required:
     A statement of financial position detailing the
    assets, liabilities and accumulated fund (capital).
     An income and expenditure account, which is
    similar to an income statement, and shows either
    a surplus of income over expenditure (profit), or a
    deficit of income over expenditure (loss), and
    which may include other trading accounts for
    activities designed to make a profit.

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.8

    Activity

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.9

    Activity (Continued)
    Stage 1

    Draw up a Statement of Affairs at the end


    of the previous period in order to identify
    the balance on the Accumulated Fund
    brought forward.

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.10

    Activity (Continued)

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.11

    Activity (Continued)
    Stage 2

    Draw up a bar trading account.

    Note – you will need to draft T-accounts to


    calculate the figure for creditors and the
    figure for bar expenses.

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.12

    Activity (Continued)

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.13

    Activity (Continued)

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.14

    Activity (Continued)
    Stage 3

    Draw up the financial statements.

    Note – you will have to draft T-accounts to


    calculate the figures for subscriptions
    received and transport costs.

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.15

    Activity (Continued)

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.16

    Activity (Continued)

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.17

    Activity (Continued)

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.18

    Accounting for subscriptions

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.19

    Accounting for subscriptions (Continued)

    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.20

    Dealing with subscriptions


     Many subscriptions owing are never paid, so
    many clubs do not include unpaid subs as an
    asset in the statement of financial position.
     Many clubs accept a life membership charge
    which entails a one-off payment. This payment is
    credited to a life membership account and
    transferred into the income and expenditure
    account over a suitable period.
     Donations and entrance fees for new members
    are shown as income in the year that they are
    received.
    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.21

    Learning outcomes
    You should have now learnt:
    1. That a receipts and payments account does
    not show the full financial position of an
    organisation, except for one where the only
    asset is cash and there are no liabilities
    2. That an income and expenditure account is
    drawn up to show either the surplus of income
    over expenditure or the excess of expenditure
    over income. These are the same as ‘profit’ or
    ‘loss’ in a profit-oriented organisation
    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.22

    Learning outcomes (Continued)


    3. That the accumulated fund is basically the
    same as a capital account
    4. That although the main object of the
    organisation is non-profit-oriented, certain
    activities may be run at a profit (or lose
    money) in order to help finance the main
    objectives of the organisation
    5. That in an examination you should treat
    subscriptions owing at the end of a period
    in the same way as accounts receivable,
    unless told otherwise
    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012
    Slide 36.23

    Learning outcomes (Continued)


    6. That donations are usually treated as
    income in the period in which they are
    received
    7. That entrance fees are usually treated as
    income in the year in which they are
    received
    8. That the treatment of life membership fees
    is purely at the discretion of the
    organisation, but that they are usually
    amortised over an appropriate period
    Frank Wood and Alan Sangster, Frank Wood’s Business Accounting 1, 12th Edition, © Pearson Education Limited 2012

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