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Zorluk: KolayAccounting Treatment of Subscriptions

Elite Debaters Club received N60,000\text{N}60,000 in cash as subscription payments from its members during the year ended 31 December 2025. At the end of the year, subscriptions amounting to N8,000\text{N}8,000 were still owing by members. What is the total subscription income to be credited to the Income and Expenditure Account for the year ended 31 December 2025?

  1. A
    N52,000\text{N}52,000
  2. N68,000\text{N}68,000Cevap
  3. C
    N60,000\text{N}60,000
  4. D
    N76,000\text{N}76,000

Cevap

N68,000\text{N}68,000
The Income and Expenditure Account operates on the accrual concept of accounting, recognizing income earned during the accounting period irrespective of when cash is received. Subscriptions owing by members at the end of the year (N8,000\text{N}8,000) represent earned income for the current financial year and must be added to cash received (N60,000\text{N}60,000), yielding a total subscription income of N68,000\text{N}68,000.

Adım Adım Çözüm

1
Identify cash received for subscriptions during the year
N60,000\text{N}60,000
This is the actual cash inflow recorded in the Receipts and Payments account.
2
Add subscriptions owing (accrued) at the end of the year
N60,000+N8,000=N68,000\text{N}60,000 + \text{N}8,000 = \text{N}68,000
Under the accrual basis of accounting, income earned during the period but not yet received must be included in the Income and Expenditure Account.

Anahtar Kavram

Accrual basis adjustment for non-profit organisation subscription income
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Konular

Accounting Treatment of Subscriptions

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