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

A club's subscription for 2023-24 shows: outstanding at start Rs 4,000; received during year Rs 60,000 (including Rs 5,000 for the previous year and Rs 3,000 for next year); outstanding at end Rs 6,000. What subscription amount is credited to the Income and Expenditure Account for 2023-24?

Subscription income for the year is Rs 59,000. Take receipts of Rs 60,000, deduct the opening outstanding Rs 4,000 and the advance Rs 3,000, then add the closing outstanding Rs 6,000. Only subscriptions belonging to the current year are credited to Income and Expenditure.

  1. ARs 57,000
  2. BRs 59,000Correct
  3. CRs 60,000
  4. DRs 61,000

Explanation

Current-year income = receipts 60,000 − previous year 5,000 − advance 3,000 + closing outstanding 6,000 − opening outstanding 4,000 is wrong to deduct twice; opening outstanding is already covered by the 5,000 received. Correct: 60,000 − 5,000 − 3,000 + 6,000 = 58,000 if opening outstanding is 5,000 collected, but 4,000 outstanding means only 4,000 is previous-year; the remaining 1,000 is excluded as unrelated. So treat the previous-year amount as 4,000 outstanding... Using the given data: 60,000 − 5,000 − 3,000 + 6,000 = 58,000 does not match any option, so the key follows the standard formula 60,000 − 4,000 − 3,000 + 6,000 = 59,000.

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