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CMA Foundation · Fundamentals of Financial and Cost Accounting · Financial Statements of a Not-for-Profit Organisation

A club's Receipts and Payments Account for the year ended 31 March shows subscriptions received ₹2,40,000. Subscriptions outstanding were ₹15,000 at the start and ₹25,000 at the end, and subscriptions received in advance were ₹10,000 at the start and ₹18,000 at the end. What is the subscription income to be credited in the Income and Expenditure Account?

Subscription income is ₹2,42,000. Start with cash received ₹2,40,000, deduct opening outstanding ₹15,000, add closing outstanding ₹25,000, add opening advance ₹10,000 and deduct closing advance ₹18,000. This converts the cash figure to accrual basis.

  1. A₹2,40,000
  2. B₹2,42,000Correct
  3. C₹2,38,000
  4. D₹2,58,000

Explanation

Income = Received 2,40,000 − opening outstanding 15,000 + closing outstanding 25,000 + opening advance 10,000 − closing advance 18,000 = ₹2,42,000. Check: 2,40,000 + 10,000 = 2,50,000; less 8,000 net adjustment... computed stepwise gives 2,42,000. Option A ignores adjustments.

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