Which of the following is NOT typically recorded in a receipts and payments account?
Show model answer
C. Credit sales to members The receipts and payments account records only cash transactions, not credit transactions.
What is the primary purpose of an income and expenditure account?
Show model answer
B. To show the financial performance of a club over a period The income and expenditure account is similar to a profit and loss account for a business, showing income and expenses over a period.
Which of the following is an example of a revenue-generating activity for a club?
Show model answer
C. Selling refreshments at a club event Revenue-generating activities are ongoing and related to the main purpose of the club.
What is the accumulated fund?
Show model answer
C. The excess of income over expenditure over the life of the club The accumulated fund represents the surplus of income over expenditure that has been retained within the club.
How should a club account for a non-current asset purchased for cash?
Show model answer
C. Debit the non-current asset account and credit the cash account This follows the double-entry principle, recording the increase in the non-current asset and the decrease in cash.
What adjustment should be made if a club has prepaid insurance at the end of the year?
Show model answer
D. Debit the insurance expense account and credit the prepaid insurance account This adjustment ensures that only the expired insurance is charged as an expense in the income and expenditure account.
Which of the following is NOT a typical item in a statement of financial position for a club?
Show model answer
D. Drawings Drawings are relevant to sole traders, not clubs. Clubs do not have owners who make drawings.
How should a club account for subscriptions received in advance?
Show model answer
B. Debit the subscriptions received in advance account and credit the cash account This records the liability for subscriptions not yet earned.
What is the correct treatment for irrecoverable debts in a club's accounts?
Show model answer
B. Debit the irrecoverable debts account and credit the trade receivables account This writes off the irrecoverable debt from the trade receivables.
Which of the following is an example of a capital expenditure for a club?
Show model answer
B. Purchasing new sports equipment Capital expenditure is spending on non-current assets, which will provide benefits over a long period.
How should a club account for a donation received for a specific purpose?
Show model answer
D. Debit the restricted fund account and credit the cash account This records the donation separately, as it is restricted for a specific purpose.
What is the effect on the accumulated fund of a surplus on the income and expenditure account?
Show model answer
B. The accumulated fund will increase A surplus on the income and expenditure account increases the accumulated fund, as it represents retained surplus income.
Which of the following is NOT a typical source of income for a club?
Show model answer
D. Bank loans Bank loans are a form of liability, not income. Income typically comes from activities related to the club's purpose or from donations.
How should a club account for the disposal of a non-current asset?
Show model answer
A. Debit the disposal of non-current asset account and credit the non-current asset account This records the disposal of the asset, with any profit or loss being transferred to the income and expenditure account.