January 2025

Life membership is a type of membership offered by clubs, societies, and non-trading organizations where a member pays a one-time fee in exchange for lifelong benefits and privileges. This fee provides the organization with immediate funds, while the member enjoys continuous access to services without recurring annual payments. Accounting for life membership fees requires special consideration to ensure accurate financial reporting over the life of the membership. 1. What Is Life Membership?… Read more

A Bar Trading Account is a specific type of trading account prepared by clubs, societies, and other non-trading organizations that operate a bar or similar facility. This account helps to determine the profit or loss made from bar operations, which is often an important source of income for social clubs, sports clubs, and community organizations. The surplus generated from bar activities usually supports the organization’s primary activities. 1. Purpose of a Bar Trading Account The Bar Trading Account serves to: Track Bar Performance: It isolates the income and expenses related to bar operations, allowing the organization to assess profitability.… Read more

Accurately accounting for subscriptions is essential for non-trading organizations like clubs, societies, and charities. Subscriptions can be received for the current accounting period, in advance for future periods, or may still be outstanding at the end of the period. Properly adjusting for these ensures the organization reflects the correct income in its financial statements. 1. Scenario Overview Let’s consider the case of Blue Horizon Sports Club for the year ending December 31, 2024.… Read more

Membership subscriptions are a primary source of income for non-trading organizations such as clubs, societies, associations, and professional bodies. These subscriptions are regular payments made by members to maintain their affiliation with the organization and to support its activities. Proper accounting for membership subscriptions is essential to ensure accurate financial reporting and to distinguish between income received for the current period and income received in advance. 1. What Are Membership Subscriptions?… Read more

An Income and Expenditure Account is a financial statement prepared by non-trading organizations such as charities, clubs, and societies. It reflects the organization’s financial performance over a specific period, showing whether the entity has a surplus (excess of income over expenditure) or a deficit (excess of expenditure over income). This account is similar to a profit and loss account in trading organizations but is tailored to the needs of non-profit entities.… Read more

Non-trading organizations, such as charities, clubs, and societies, manage various types of funds to support their operations and achieve their objectives. Unlike profit-oriented businesses, non-trading organizations aim to utilize these funds for specific purposes aligned with their mission. The proper classification and management of these funds are crucial for transparency, accountability, and effective financial planning. 1. What Are Funds in Non-Trading Organizations? Funds in non-trading organizations refer to the financial resources set aside for specific purposes or general operations.… Read more

Non-trading organizations, also known as non-profit organizations, rely on various sources of income to fund their activities and achieve their missions. Unlike profit-oriented businesses, their primary goal is not to generate profit but to provide services or support causes. The income generated is used to cover operational costs and reinvested to further the organization’s objectives. 1. Characteristics of Non-Trading Organization Income Non-Profit Purpose: Income is used for the organization’s mission, not for personal gain or shareholder distribution.… Read more

Non-trading organizations, also known as non-profit organizations, include entities like charities, clubs, societies, and associations that operate for purposes other than making a profit. Their primary goal is to serve a social, cultural, or community-oriented objective. Unlike commercial businesses, non-trading organizations focus on managing resources to achieve their mission, and their accounting systems reflect this focus. 1. Characteristics of Non-Trading Organizations Non-trading organizations differ from profit-driven businesses in several ways: Purpose: Their main objective is to provide services or promote causes, not to earn profits.… Read more

An Income and Expenditure Account is a financial statement used primarily by non-profit organizations to summarize their income and expenses over a specific period. Unlike a profit and loss account, which focuses on profitability, the income and expenditure account aims to determine whether there is a surplus (excess income over expenses) or a deficit (excess expenses over income). It provides a clear picture of how resources have been utilized in achieving the organization’s objectives.… Read more

Incomplete records refer to situations where a business does not maintain full and systematic accounting records. This often happens in small businesses that do not follow a formal double-entry bookkeeping system. In such cases, accountants must reconstruct financial statements using the available data, which can include bank statements, cash books, and other partial records. 1. What Are Incomplete Records? Incomplete records occur when: Only some transactions are recorded, and others are missing.… Read more