Objective Assessment on the Accounts of Clubs and Societies

by Ken Delaney-Moore, Sheffield Hallam University

This assessment covers the following material:

• Terminology used in the accounts of clubs and societies
• Receipts and Payments accounts
• Income and Expenditure accounts
• Balance Sheets of clubs / societies

If you are unsure about attempting the assessment, it may be advisable to have a look at the worksheets first. When you are done, please fill in the on-line evaluation form in order for us to monitor the quality of the materials we provide for you. Tell us what we're doing right and wrong. It takes very little time, and your opinions are valued - thank you.

Each question comes with three buttons:

1. 'HINT' - provides help if you need it
2. 'MARK' - will tell you your mark for that question and (if you were incorrect in any way, it may give advice - be careful to read this advice).
3. 'EXPLAIN' - should provide you with a full explanation of the answer, but this button is only active after you have attempted the question (twice, in the case of the first ten questions).

THE ASSESSMENT STARTS BELOW. NO - ONE EXCEPT YOU WILL SEE YOUR SCORE - 'BIZ/ED' DOES NOT KEEP A RECORD.

Note that in some of these questions there is only one correct answer, but for other questions there may be more than one answer. You will be told this information in advance, so read carefully:

For questions 1 to 10 there is only ONE correct answer. Each correct answer is worth two marks. You are allowed TWO ATTEMPTS for each question. (i.e. you are allowed a second choice if your first choice is incorrect).

Q1. Who are the sole owners of a not-for-profit club or society? (Select one answer) (a) The general public (b) The members (c) The shareholders (d) The elected committee

Did you read the explanation provided by the 'explain' 'button for the previous question?

Q2. Below is a list of four documents most commonly found in the books of private sector organisations. Which one is most similar to the 'receipts and payments account' of a club? (Select one answer) (a) The Profit and Loss Account (b) The Sales and Purchases day books (c) The Journal (d) The Cash Book

Q3. If a club kept a full double-entry system, the entries for the transfer of a surplus would be: (Select one answer) (a) Debit income and expenditure a/c, credit accumulated fund (b) Debit income and expenditure a/c, credit receipts and payments a/c. (c) Debit accumulated fund, credit income and expenditure a/c (d) Debit balance sheet, credit income and expenditure a/c

Did you read the explanation provided by the 'explain' 'button for the previous question?

Q4. The Gherkin Appreciation Society keeps a double-entry book-keeping system and runs a gin-only bar as a side-activity. Last year the bar made a profit. How should this profit be dealt with in the books? (Select one answer) (a) debit receipts and payments a/c, credit income and expenditure a/c (b) debit bar trading a/c; credit income and expenditure a/c (c) debit bar trading a/c, credit accumulated fund a/c (d) debit income and expenditure a/c and credit accumulated fund a/c

Don't forget that the MARK button often provides hints as well!

Q5. The Anorak - Spotters Society received £595 for subscriptions in 'year 5'. £45 of this money was in arrears for 'year 4', and £60 was payment in advance for 'year 6'. During year 4 £70 had been paid in respect of year 5, and at the end of year 5 £55 was still outstanding (owing) for the year. How much subscription money should be credited to the year 5 income and expenditure a/c? (Select one answer) (a) £615 (b) £575 (c) £595 (d) £625

Q6. The 'Tawny Pippits' is a bird-watchers' society. It owns several pairs of Binoculars, which are regarded as capital equipment. net book value of binoculars at start of year: £1,480 net book value of binoculars at end of year: £1,670 cost of new binoculars bought during the year: £350 during the year an old pair with a book value of £40 was sold to a member for £25 How much should be charged to the Income and Expenditure account for depreciation of Binoculars? (Select one answer) (a) £290 (b) £140 (c) £135 (d) £120

Q7. Darrowforth Dabblers is a group of painting enthusiasts. They exhibit and sell their art periodically at a local Church Hall. They also operate a 'refreshments bar' (soft drinks and confectionery) when exhibiting. Calculate the refreshments profit transferred to the Income and expenditure account from the following information, (all of which relates to refreshments): Start of year: Stock £25, creditors £12 During the year: Stock paid for £73; receipts from sales £195 End of year: Stock £37, Creditors £19 (Select one answer) (a) £134 (b) £127 (c) £141 (d) £158

Don't under-estimate the power of the EXPLAIN button!

Q8. Ampleby Anglers accumulated fund showed a balance of £15,600 at the end of the year. At the beginning of the year the balance stood at £12,700 and during the year a donation of £5,000 had been received from the estate of a member who had passed away. The donation was entirely capitalised. What was the balance on the income and expenditure a/c? (Select one answer) (a) A deficit of £2,900 (b) A surplus of £7,900 (c) A deficit of £2,100 (d) A surplus of £2,100

Q9 Staunton Star-Gazers own an Observatory. For a fee they allow another local astronomy group (Compton Comet-Chasers) to use it. At the end of Year 1 the Comet-Chasers had paid in advance £150 for the first part of Year 2. How should this appear in the balance sheet of each society? (Select one answer) (a) A current asset to the Comet-Chasers and a current asset to the Star-Gazers. (b) A current liability to the Comet-Chasers and a current asset to the Star-Gazers. (c) A current liability to the Comet-Chasers and a current liability to the Star-Gazers. (d) A current asset to the Comet-Chasers and a current liability to the Star-Gazers.

Q10. Instead of paying an annual subscription fee, members of Hurst Wood Tennis Club have the option of paying a one-off 'life' membership fee of £500. At the start of 'Year 7' there were already eighteen life members. The Receipts and Payments a/c for year 7 showed that £3,000 had been received in respect of new life subscriptions. The policy of the club is to capitalise life-subscriptions and to transfer this money into the Income and Expenditure a/c over a twenty - five year period. How much should be shown in the Income and Expenditure a/c for year 7 under the heading: 'Life Subscriptions'? (Select one answer) (a) £360 (b) £9,000 (c) £12,000 (d) £480

The EXPLAIN button should provide you with a full explanation of the workings to the previous question.

For the last five questions there MAY BE MORE THAN ONE correct answer. You are allowed only ONE ATTEMPT at these questions. Each question carries a total of four marks.

On questions 11 to 15, note that when you click on the 'MARK' button, the red crosses and green ticks are MARKING YOUR SELECTIONS - they are NOT suggesting which of the original statements are true or false

Q11. Which of the following are differences between a 'receipts and payments account' (R & P a/c) and an 'income and expenditure account' (I & E a/c)? (Select one or more answers) (a) An R & P a/c takes account of the accruals concept whereas the I & E a/c does not. (b) An I &E a/c would include depreciation on fixed assets whereas the R & P a/c would not. (c) Capital expenditure would be present in a R & P a/c but not in an I & E a/c. (d) The balance on the I and E a/c is transferred to the accumulated fund whereas the balance on the R & P a/c is simply carried forward to the next period.

On questions 11 to 15, the 'MARK' button should provide you with an explanation of every option that you selected. The 'EXPLAIN' button will give a more general explanation.

Q12. The 'Butterflies and Bees' Boxing Club received £3675 subscription money during 'year 3'. the following information is also available: Subs owing at the end of year 2: £236, (all of which was received in year 3) Subs paid in advance during year 2 were £170 Subs owing at the end of year 3: £318 Subs received during year 3 in respect of year 4: £74 Which of the following statements are TRUE? (Select one or more answers) (a) The amount credited to the income and expenditure account is £3,497 (b) The £318 will appear in the balance sheet as at the end of Year 3 as a current liability (c) The £170 paid in advance at the start of the year represents a current asset to the club at that date (d) The receipts of £3,675 will appear on the credit side of the subscriptions account for year 3

Q13. The following payments were all made by the Middle Wallop Cricket Club during year 1. Which one or ones should appear in the Income and Expenditure Account for that year? (Select one or more answers) (a) Repairs to clubhouse, £1,400 (b) Stage-payment to builder for extension to clubhouse £2,000 (c) Bank loan repayment £500 (d) Bank loan interest £175

Q14. At the start of 'Year 6' The Marlsea Sailing Club owned 12 club yachts with a combined book value of £490,000. Depreciation was to be applied on a reducing-balance basis at the rate of 15% on all yachts remaining with the club at the end of the year. During the year the club disposed of a yacht with a book value of £30,000. The value of the sale was £34,500. No yachts were bought during the year. Which of the following statements accurately describe the 'Year 6' final accounts? (Select one or more answers) (a) £34,500 will be credited to the Income and expenditure account for the disposal (b) The combined net book value of yachts at the end of the year is £391,000 (c) The Income and Expenditure account will be debited with £73,500 for depreciation of yachts (d) £4,500 will be added to the income and expenditure account for the disposal

Q15. The Stichemup Snooker Club has a life membership scheme in addition to the annual membership fee. Which of the following are likely to be taken into account when calculating the amount which is transferred from the accumulated fund into each years Income & Expenditure a/c for life subscriptions? (Select one or more answers) (a) The average age of members upon joining the club (b) The expected average age of members upon ceasing to be active within the club (c) The life membership fee (d) The ordinary annual membership fee

Click to view your total score for all the above questions that you have attempted.