IGCSE Accounting 0452 - 5.4 Clubs and Societies - Receipts and Payments Accounts

Objective: Prepare Receipts and Payments Accounts

This section focuses on preparing a Receipts and Payments account for a club or society. This account helps to track the income and expenditure of the organization over a specific period.

Understanding the Receipts and Payments Account

A Receipts and Payments account is a type of income and expenditure statement. It shows all the money that comes into the club or society (receipts) and all the money that goes out (payments) during a defined period, usually a year.

Key Terms

• Receipts: Money received by the club or society.
• Payments: Money spent by the club or society.
• Income: Money received.
• Expenses: Money spent.
• Surplus: When income is greater than expenses.
• Deficit: When expenses are greater than income.

Preparing a Receipts and Payments Account

1. Identify the period: Determine the start and end dates for the account.
2. List all receipts: Record every source of income received during the period.
3. List all payments: Record every expenditure incurred during the period.
4. Calculate the total receipts: Sum up all the income.
5. Calculate the total payments: Sum up all the expenses.
6. Calculate the net income: Subtract the total payments from the total receipts. (Total Receipts - Total Payments = Net Income)
7. Determine if there is a surplus or deficit: If the net income is positive, there is a surplus. If it is negative, there is a deficit.

Example Receipts and Payments Account

The following is an example of a Receipts and Payments account for a school drama club for the year ending 31st December 2023.

Date	Description	Receipts (£)	Payments (£)
2023-01-15	Membership Fees	250	-
2023-02-20	Fundraising - Bake Sale	120	-
2023-03-10	Grant from School	300	-
2023-04-05	Props Purchase	-	85
2023-05-12	Venue Hire	-	150
2023-06-28	Costume Materials	-	75
2023-12-25	End of Year Fundraising	50	-

Totals:

	Receipts (£)	Payments (£)
Total Receipts:	$250 + $120 + $300 + $50 = $720	-
Total Payments:	-	$85 + $150 + $75 = $310

Net Income: $720 - $310 = $410

Conclusion: The drama club has a surplus of $410 for the year ending 31st December 2023.

Practice Questions

1. A school debating society received £150 in membership fees, £80 from a sponsored debate, and a £20 grant from the school. They spent £50 on new debate materials and £30 on refreshments. Calculate the debating society's net income.
2. A gardening club received £200 from subscription fees and £100 from a plant sale. They spent £60 on seeds and £40 on tools. What is the club's surplus or deficit?