Joey Duggan

Matthew Mannion

ACCOUNTING
Club Accounts

What is a club?
Clubs are non-profit-making organisations or associations that people join for a
variety of reasons. Clubs exist for the benefit of their members rather than to make
a profit.
Examples of clubs are;
Local GAA clubs

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Running a Club
Different clubs will have different types of committee, but most consist of at least a
chairperson, a secretary and a treasurer.

The Chairperson
The chairperson is in overall charge of the club. The chairperson has the following
duties;
To take charge of all meetings including the AGM.
To make sure that the club is run efficiently and lawfully.
To sign all checks.

The Secretary
The secretary of the club has these duties;
To keep the minutes of all club meetings.
To send an agenda to all club members and to keep them up to date through
newsletters and the clubs website.
To write letters on the clubs behalf.
To carry out all the administration work of the club

The Treasurer
The treasurer is in charge of the clubs finances. The duties of the treasurer are as
follows;

To collect the members subscriptions and issue receipts.

To make payments on behalf of the club.
To record all the clubs receipts and payments.
To prepare the final accounts and balance sheet.
To prepare a fanatical report for the club.
To make sure that the clubs accumulated fund is invested properly.

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The Clubs Accounts

Statement of Accumulated Fund
The capital of a club is known as the accumulated fund. It is prepared on the first
day of the year. All of the assets and liabilities of the club on that day must be
listed. It is the difference between the assets and liabilities at the begging of the
year.
Total assets - total liabilities = accumulated fund
Hidden Assets and Liabilities
The bank balance contained in the receipts and payments accounts.
Any loans that may have been repaid during the year.
Any interest due on loans at the beginning of the year.
Levies due from the previous year.
Investments

Receipts and Payments

This is a detailed record of all the clubs receipts and payments during a period. It
also shows the amount in the bank at the start and end of the year.
All cash receipts during the whole year are recorded on its left hand (debit) side.
While all the cash payments during the whole year written on its right hand (credit)
side. Only cash transactions are recorded in this account. Its closing balance
indicates closing cash in hand and closing cash at bank.

Bar/ Restaurant trading accounts

This is prepared if the club carries on some form of trading activity. These are used
to calculate profit/ loss on a bar/ restaurant. This information is then transferred to
income and expenditure a/c.
Bar/ Restaurant trading accounts tips
Bar receipts must include only receipts that relate to the current year.

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Income and Expenditure account

This is a summary of the clubs income and expenditure. It is different to the
receipts and payments account as;
It does not show the opening bank balance
It does not show any payments or receipts that are not for normal day to day
club activities.
Income and Expenditure account tip
Include all income and all expenditure for the current year.
Capital expenditure is not included e.g. purchase of equipment, repayment
of loan, etc.

Balance Sheet
The balance sheet is a list of the assets, liabilities and capital of a club on a
particular day.
Assets; anything of value the club owns
Liabilities; anything that the club owes
The financed by section is altered slightly for a club. It must include life
membership, levy reserve fund, accumulated fund and excess of income/
expenditure. The other sections stay the same.

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Income
Main Source of Income
A major part of the clubs income is Membership fees. This is a fee paid by
members. It is paid annually to the club. Fund raising activities also cover the clubs
expenditure.

Special income/ receipts

Levies: Special payment made to the club by its members to fund a project such as
an extension. A levy is not a loan. As they are received, they are debited to the
bank account and credited to a levy reserve fund account. This reserve is included
in the financed by section of the balance sheet
Life Membership: Fees paid that entitle members to use of facilities for remainder
of his/ her life. As life memberships are received, they are debited to the bank
account and credited to a life membership account which is included in the
financed by section of the balance sheet as a long-term liability.
Entrance fees; Fees sometimes payable by new members in the first year of
membership. Included as income in the income and expenditure a/c. This is to be
added to the accumulated fund in the financed by section of the balance sheet.
Sponsorship; If annual sponsorship occurs, then simply include with the income
and expenditure a/c. One-off sponsorship is added to the accumulated fund in the
financed by section of the balance sheet.
Grants; If an annual grant is included, simply include in the income and
expenditure a/c. A once-off grant is added to the accumulated fund in the financed
by section of the balance sheet.
Donations/ gifts; If it is small in relation to the clubs income, treat as income in
the income and expenditure a/c. If it is larger then add it to the accumulated fund in
the financed by section of the balance sheet.

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Procedure
Prepare the accumulated fund, making sure to look for hidden assets/
liabilities.
Prepare the bar/ restaurant trading account, adjusting the sales and purchases
for any debtors and creditors
Prepare the income and expenditure account, be sure to
I. adjust the subscriptions figure
II. calculate the profit/ loss on activities such as catering
III.
include depreciation and life memberships
IV. Adjust any expense
Prepare the balance sheet, include;
I. any new assets purchased
II. the depreciation calculated
III. new investments
IV. changes to life membership
V. changes to levy reserve fund

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Sample Question and Solution

Question 1
Included among the assets and liabilities of the Wood Brook Golf Club on 1/1/2008
were the following;

clubhouse and courts: 480,000

bar stock: 2,300
equipment: 25,600
life membership: 48,000
bar debtors: 310
bar creditors: 1,055
subscriptions prepaid: 400
8% government investments: 25,000
Investment income due: 500
levy reserve fund: 40,000
ESB due: 150

He following is a summary of the clubs receipts and payments a/c for the year
ended 31/12/2008
Receipts
Bank current account
Subscriptions
Investments income
Entrance fee
Bar Receipts
Catering receipts
Annual sponsorship

Payments

3,220 Sundry expenses

122,450 Bar purchases
1,500 Equipment
17,500 Catering Costs
Repayment of loan and
58,620 interest
8,170 Transfer to building society
21,000 Balance
232460

88,290
41,300
14,900
5,020
44,500
25,000
13,450
232,460

You are given the following instructions:

I.
II.

Bar stock on 31/12/2008/ is 2,100

Bar debtors and bar creditors on 31/12/2008 were 275 and 1,750
respectively.

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III.
IV.
V.

VI.

Equipment owned on 31/12/2008 is to be depreciated at a rate of 20% of

cost.
Clubhouse and courts are to be depreciated at a rate of 2%.
Subscriptions include:
subscriptions for 2009 amounting to 600
two life memberships of 4,000 each
levy for 2008 of 200 on 200 members
levy of 200 on 6 members for 2007
Life membership was to be written off over a 10- year period commencing
in 2008

You are required to:

a) Show the clubs accumulated fund (capital) on 1/1/2008
b) Show the income and expenditure account for the year ending 31/12/2008
c) Show the clubs balance sheet on 31/12/2008
d) Indicate the points you, as the treasurer, might make if the members at the
AGM of the club proposed to reduce the annual subscription by 15%.
(100 marks)

Solution 1
Note 1; Bank
The balance in the receipts and payments a/c at the beginning of the year is on the
debit side; it is an asset of the club and is entered as such in the accumulated fund.
The balance in the receipts and payments a/c at the end is also an asset and will be
entered in the balance sheet as a current asset.
If the balance at the beginning or end were to appear on the credit side, it would be
treated as a current liability.
Note 2; Loan
Loan = 40,000
This was not paid off until 31/12/2008; therefore it was still owing on the 1/1/2008
and must be included in liabilities at the begging of the year.
Total interest paid is 44,500 - 40,000= 4,500
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4,500 = 1 years interest; the loan was repaid on 31/12/2008, thus one years
interest is for 2008, leaving of the years interest for the previous year due at the
beginning of 2008.
1 years = 15months
4,500/15 = 300: 300 X 12months = 3,600 Income and Expenditure
300 X 3months = 900

Accumulated Fund

Note 3; Levies
There are levies due for 2007: 200 X 6 = 1,200; these are amounts due to the
club and as such are included with assets at the beginning of the year.
Note 4; Trading Account
Remember to adjust receipts and purchases for debtors and creditors at the
beginning and the end.

Bar receipts
Less cost of slaes
Opening Stock
Purchases
Less Closing Stock
Bar Profit

2,300
41,995
44,295
2,100

58,585

42,195
16,390

Note 5; Subscriptions
Only subscriptions that relate to the current year can be included in the income and
expenditure a/c. Life membership and the levy reserve fund are dealt with
separately from subscriptions and therefore must be subtracted.

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Subscriptions received
Add subscriptions prepaid
beginning
Less subscriptions prepaid end
Less life membership
Less levies for 2007
Less levies for 2008
Subscriptions (I & E A/C)

112,450
400
-600
-8000
-1,200
40,00
0
73,05
0

It is only the life memberships paid this year that have been included with
subscriptions; therefore it is only two payments of 4,000 each that are deducted
and not the total life membership.
Note 6; Investments Income
Investment income due of 500 at the beginning of the year is a current asset and is
therefore included in the accumulated fund.
The income and expenditure a/c must show all income that should have been
received in the current year and only this income.
8% investments of 25,000; 25,000 X 8% = 2,000 is the investment income
receivable in this year; include in the income and expenditure a/c.
The amount actually received in 2009 is 1,500 (receipts and payments a/c).
However, part of the money includes a payment of the amount that was due at the
beginning of the year:

Less

Less

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1,500 paid
500 due beginning
1,000 paid in relation to this year
2,000 income & expenditure a/c
received in relation to this
1,000 year
due at the end (show as
1,000 current asset in balance sheet

Note 7; Life Membership

New life membership: 48,000 + 8,000 = 56,000
This amount is to be written off over 10 years: 56,000/10 = 5,600
Treat life membership 5,600 in the income and expenditure a/c as income
Life membership 56,000 - 5,600 = 50,400 in financed by section of the
balance sheet as a long term liability.
Note 8; Depreciation
Remember to include any new fixed assets that have been purchased during the
year; these will be found on the credit side of the receipts and payments a/c.
Equipment; originally 25,600 + 14,500 purchased = 40,500
20% of 40,500 = 8,100 recorded as expenditure in the income and
expenditure a/c and in the balance sheet under fixed assets.
Clubhouse and Courts; 2% of 480,000 = 9,600 recorded as expenditure in the
income and expenditure a/c and in the balance sheet under fixed assets.
Note 9; Catering/ Competitions
Always deduct expenses from receipts to show weather the club made a profit or a
loss on these activities and show the profit/ loss only in the income and
expenditure a/c.
Catering receipts
Les catering costs
Profit from
catering

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8,170
5,020
3,150

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