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 shows subscriptions received of ₹84,000. Subscriptions outstanding were ₹6,000 at the start and ₹9,000 at the end of the year, and subscriptions received in advance were nil at both dates. What subscription income is credited to the Income and Expenditure Account?
Subscription income is ₹87,000. Cash received of ₹84,000 is reduced by the ₹6,000 opening outstanding relating to the previous year and increased by the ₹9,000 closing outstanding relating to this year.
- A₹87,000Correct
- B₹81,000
- C₹84,000
- D₹93,000
Explanation
Income = Received 84,000 − opening outstanding 6,000 (belongs to the earlier year) + closing outstanding 9,000 = ₹87,000. Check: opening 6,000 + income 87,000 − received 84,000 = closing 9,000. Choosing ₹81,000 reverses the outstanding adjustments.
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