1. SUBSCRIPTION:-This is the main source of income by NPO .It is the fees which is received by organization from its member, to keep the membership active.
Subscription which belong to the current year should be shown as income whether fully received or not. And subscription received in current year which belongs to the previous year or next year should not be shown as income of the current year. It should be calculated keeping accrual basis.
| TREATEMENT: CALCULATION OF CURRENT YEAR`S SUBSCRIPTION | ||
| Amt Received during the year | +++ | |
| ADD:- O/s at the end of the Current Year :- Received. in Advance at the end Of Current Year |
++ ++ |
+++ |
| LESS:- O/s/Unpaid at the end of the Last Year :- Received In Advance during Current Year for following year |
--- --- |
+++ |
| CURRENT YEAR SUBSCRIPTION | ++++ | |
TREATEMENT IN CURRENT YEAR BALANCE SHEET
| BALANCE SHEET (CLOSING) | |||
| Received in advance (during current year) |
++++ | O/s at Current Year Still O/s for Previous Year: ++ Add: O/s for Current Year: ++ |
++++ ++++ |
FOR EXAMPLE :-
1. SACRED HEART CONVENT SCHOOL RECEIVED DURING THE YEAR 2007 RS 2, 50,000 AS SUBSCRIPTION SHOWN BY IT`S RECEITS &PAYMENTS A\C. ADDITIONAL INFORMATION ARE AS FOLLOWS DURING THE YEAR:-
Subcription Received For The Year 2006 RS.5000
Subcription Received For The Year 2008 RS.4800
Subcription Unpaid For The Year 2007 RS.5100
Subcription Unpaid At The Begining 2007 RS.13,600
Show The Amount To Be Credited To Income &Expenditure A\C And Balance
Treatement For The Same.
2. CALCULATE THE AMOUNT OF SUBSCRIPTION SHOWN IN INCOME AND EXPENDITURE.
| 31-12-04 | 31-12-05 | |
| O/S SUBSCRIPTION | 24,000 |
20,000 |
| SUBSCRIPTION IN ADVANCE | 2200 | 5000 |
| Total subscription received during the year2005 is Rs 3, 25,000 | ||
| (ANS:-3, 18,200) | ||
2. ENTERANCE FEES/ADMISSION FEES :-When a new member is admitted the fees should be accounted as Revenue receipts & credited to the income and expenditure a\c. If however the entrance fees amount contains a capitalized portion of a part of the amount of the annual fees, this should be added to the capital fund and not income expenditure a\c
3. LIFE MEMBERSHIP FEES :-These are non-recurring receipts. An example in case of Clubs would be the fees of life membership. Therefore it should be added to the capital fund on the liabilities side in the balance sheet.
4. DONATIONS :- It is the amount contributed by the members, supported as well as wishes of organization in form of cash or any kind
