Earned conducting business and club income. E. g. Membership fees, sale of refreshments, donations, etc. Not sale of assets. Gain to club. Increase surplus. Answer: -membership fees -entrance fees -sale of refreshments -sale of uniforms Question Two: Definition of Expenditure: Refers to the amounts paid or payable. Normally incurred while running the club. Necessary to generate income. Either used up immediately or have no lasting value. Loss to club.
Decrease surplus. Debited to Nominal accounts section in General Ledger. E. g. Rent expense, stationary, electricity, wages, etc. Answer: -uniforms to sell -refreshments to sell -electricity -water -rent expense -salaries/wages -stationary Question Three: Answer: •Membership Fees: –also known as subscriptions. -usually most important income (revenue) to a club, major portion. -together with additional income, cover expenses. -fixed amount. -paid by members of club. -usually payable annually, sometimes quarterly or even monthly. income to club. •Income Receivable/Accrued income: – (same as usual), income still owed to us but not yet received. E. g. members who have not yet paid subscription. •Income Received in advance: – (same as usual), income received before it was due to be paid.
E. g. members that pay their subscription early. •Honorarium: -certain people that do a lot of work (bulk of the work) for the club are occasionally voted a sum of money (remunerated) as a token of appreciation at the end of the year. -expense to club. Entrance Fees: -new members may be expected to pay a fee to join the club. -normally a once off fee. -I. e. when the member joins for the first time. -income to club. •Affiliation Fees: -if the club wants to enter a team to play other teams in the area then the club needs to pay an ‘affiliation fee’ to the organising body. -paid annually. -expense to club. •Accounts using the same principle as “consumable stores” and “consumable stores on hand” and also “expenses prepaid’, etc. do in a trading concern: -e. g. tennis balls’ and ‘tennis balls on hand’ -in clubs these consumable stores are sometimes also sold as “trading stock” -once the item is used (not necessarily used up), (by the club), it is immediately considered an expense. •
Refreshments: -recorded the same as one would record trading stock. •Membership Fees Written Off: -members would get expelled if their membership fees are not paid over a long period of time (and warning) and their bad debts would be written off. -same principal as writing off bad debts in a trading oncern. Question Four: Answer: Membership fees are due on the first day of each year. They are paid annually, directly to the club. The club has a meeting at the end of each year to clarify the membership fees of the next year. An invoice will be sent out to each member indicating the money due to the club on the first day of the year. This fee must be paid by the end of the first month. If it isn’t, the member will be addressed by the club via an email. By the end of the second month, a letter will be sent in the post.
This letter will warn them of the repercussions of not paying and advise them on how they can go about paying if they are struggling (a percentage each month). These warnings will continue for the entire year. In the last month of the year they will get the final warning, which will be via email, post and face to face, in which they will be warned that if not paid by the last day of the year, the club will expel the member. If the membership fee is still not paid by the first day of the next year, it will be written off and the member will be expelled.