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34. Accounts of Non-Trading Organizations

Non-Trading Organizations

Unlike trading organizations, non-trading organizations such as clubs, societies, associations, are not formed mainly to make profits.  Rather, they exist to promote their members' cultural, social and recreational interests.

The normal activities of such non-trading organizations are therefore different from that of a trading organization as the activities of the former are not designed solely to obtain profit.  However, some non-trading organizations may run a bar or a restaurant on a permanent basis for profits.  

Also, they may, at one time or another, organize fund-raising projects such as a fun-fair or a jumble sale.  Such projects are not permanent.  They may be held to raise funds for a specified purpose such as to add to a club's building fund, or merely to increase the club's finds.

Receipts of Non-Trading Organizations

The main items of revenue receipts are subscription from members, and interest from investments or Bank Accounts.  Gross trading profits (total sales revenue less cost of goods sold) from permanently run bars and restaurants is another source of revenue receipts for some none-trading organizations.

Donations, unless specifically stated to be set aside for a capital purpose, e.g. the club building fund, are normally treated as revenue receipts.

Proceeds from fund-raising projects such as sale of refreshments and the like, are normally treated as revenue receipts, unless it is specifically stated that the proceeds from a particular project are to be set aside for a capital purpose such as building a swimming pool.

Other examples of revenue receipts are locker fees, charges to other clubs for the use of premises, sale of golf clubs and tennis balls.

Clear examples of capital receipts are legacies, endowments and government grants.  Legacies are sums of money left to a club by someone in his will.

Expenditure of Non-Trading Organizations

Non-trading organizations have both revenue as well as capital expenditure.

The main revenue expenditure of non-trading organizations are rent of club premises; caretaker's and staff wages; honorarium; other miscellaneous expenses like laundry, repairs and maintenance to club equipment and premises, cost of shuttlecocks, tennis balls or printing paper and stationery.

If the club were to have fund-raising projects, another important revenue expenditure would be the cost of such fund-raising projects.  This must be set off against the proceeds obtained from the fund-raising projects.

Examples of capital expenditure are payments for the purchase of fixed assets to be used in the club, such as the purchase of table tennis nets, tables and furniture for use in the club house.

Receipts and Payments Account

The Receipts and Payments Account is the equivalent of the Cash or Bank Account of a trading organization.  It summarizes the main items of cash or cheque receipts and cash or cheque payments made during the course of the financial period or year.

Income and Expenditure Account

The Income and Expenditure Account is the equivalent of the Profit and Loss Account of a trading organization.  All items of capital expenditure and capital receipts are excluded, e.g. the purchase of a new table-tennis table or the the donation received for the construction of a tennis court cannot be recorded here as capital expenditure and capital receipt.

Accumulated Fund Account

Accumulated Fund Account is equivalent of the Capital Account for a trading organization.  All additions to the accumulated fund are credited to this account.  Thus, large legacies and donations towards specific capital project are credited here straightaway. 

The balance on the accumulated fund for the beginning of a particular period is the difference between the total value of its assets and its total liabilities at that date (that is, the beginning of the financial period).  It is very important to work out the figure for the accumulated find (at the beginning of a period) before drawing up the Balance Sheet at the end of the period.  The surplus from the Income and Expenditure Account is added to this fund, while the deficit is deducted from it. 

Differences between the Receipts and Payments Account and the Income and Expenditure Account


Similarities and Differences between the Profit and Loss Account and the Income and Expenditure Account



  1. Both capital and revenue receipts, and capital and revenue expenditure are recorded here.

  2. End-of-year debit balance in this account is taken to the Balance Sheet as 'cash and bank'.

Profit or loss from this account is taken to the Income and Expenditure account as a revenue receipt or as a revenue expense respectively.

  1. Revenue receipts and revenue expenditure items are matched against each other in line with the matching or accrual concept.

  2. 'Excess' or 'deficit' in this account is taken to the Balance Sheet to be shown as an addition, or as a subtraction to the Accumulated Fund.

All capital receipts, e.g. legacies and donations for a specific capital project and 'excess' from Income and Expenditure Account are credited here; ('deficit' is debited).

Subscription Account

Subscription in arrears b/d (not collected during the year)


Subscription received in advance b/d (collected in previous year)


Income & Expenditure (True amount of subscription receivable for the current year)


Total cash received as subscription during the current year


Subscription in advance c/d (collected for subsequent year)


Subscription written off as bad debts


    Subscription in arrears c/d (not yet collected for current year)






Subscription in arrears b/d


Subscription in Advance b/d


Format for Subscription Account