Home › Tamil Nadu HSC (Class 12) › accountancy › Accounts of Not-for-Profit Organisation › A club has 300 members each paying Rs 200 a year…
A club has 300 members each paying Rs 200 a year. Subscription received for the current year was Rs 48,000. The subscription credited to the income and expenditure account is:
ARs 60,000
BRs 48,000
CRs 12,000
DRs 51,000
Answer & Solution
Correct answer: A. Rs 60,000
1. Where the number of members and the annual rate are given, they fix the income of the year directly.
2. Total subscription due for the year is 300 members multiplied by Rs 200, which is Rs 60,000.
3. Cash received for the current year was only Rs 48,000, so Rs 12,000 remains outstanding.
4. That outstanding Rs 12,000 is added to the Rs 48,000 received, bringing the credit back to Rs 60,000.
5. The Rs 12,000 also appears on the assets side of the balance sheet as subscription outstanding.
6. Option B stops at the cash figure, which is exactly the accrual-versus-cash error this item tests.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 2 "Accounts of Not-for-Profit Organisation", Illustration 9_
Related questions
Which item would appear in the receipts and payments account but NOT in the income and expIn this textbook's balance sheets, legacies and life membership fees are:A club has 400 members each paying Rs 150 a year. Subscription outstanding for the currentA match fund stood at Rs 30,000. Receipts for the match fund during the year were Rs 22,50A club's assets total Rs 1,30,000 and its liabilities, being subscription in advance Rs 5,Prize fund stood at Rs 60,000. During the year interest on prize fund investments was Rs 6Opening stock of sports materials was Rs 3,000, purchases during the year Rs 9,000 and cloSubscription received during 2018 was Rs 1,50,000. Outstanding subscription was Rs 10,000