Accounting

1 January 2017

The income sources have specific ledger accounts which they are recorded in. Some of these differ to those of a business. Membership fees and entrance fees are recorded in the Membership Fees and Entrance Fees accounts in the general ledger respectively. These accounts are found in the Nominal Accounts section and are considered income accounts.

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Unlike a business, the buying and selling of goods is recorded in accounts specifically for those goods (There is no Cost of Sales or Trading Stock account). For instance, items sold for cash at the tuckshop will be recorded in the Sales and the Refreshments accounts. Jerseys bought on credit will be recorded in the Jersey and Creditors’ Control accounts. The Club therefore has a Refreshments account (Tuckshop goods), a Jersey account and a Sock account (both for Club Shop goods). These are Income and Expense accounts.

Instead of income being recorded to the credit side of Profit and Loss (as would be done in a business), it is instead recorded to the credit side of Income and Expenditure. Please note that the Income and Expenditure Account is different to the Receipts and Payments account (which records money received and payed). Expenditure: The Club will have the following items of expenditure: * Tuckshop and Bar – The Tuckshop and Bar sells refreshments, but a profit will not necessarily be made. * Club Shop – The Club Shop sells club jerseys and socks. However, the club will not necessarily make a profit off of the sales. Membership Fees Written Off – Despite this issue not often being faced, there are cases where a members fees need to be written off.

Wages – Employees are a necessity of any business, and so the Club will have a complement of staff who are payed wages. * Telephone, Electricity and Water – No business can run without telephones, electricity and water. * Maintenance Fees – The Club will have to maintain the facilities, and so the fees for doing so are a major expenditure. (Note: Here Tuckshop and Bar and Club Shop are assumed to be a regular source of loss) Membership fees written off are recorded in the Membership Fees Written Off account.

The payments of the club will not be recorded in a Profit and Loss account, rather they will be recorded in the Income and Expenditure account, on the debit side. Membership Fees Policy The collection of membership fees is done on an annual basis. Members are sent an invoice and are given 30 days to pay their account. Members are given the option of payments through EFT or cash. Neither is preferable, as the cash amounts are small enough that they are easy to manage and keep track of. Members are also given the option of appropriate donations in exchange for the writing-off of the money that they owe.

There is seldom an issue with not receiving payments, as all members are thoroughly examined before being allowed into the club. Potential members’ ability to pay as well as their physical health are checked in the examination process. In the unlikely event that members do not pay within 30 days, they are sent a warning letter and their membership status is suspended until full payment is received. If after the season is half over payment has not been yet received, the member’s account will be closed and their fees written off.

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