Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Advertisement
Advertisement
Advertisement
Advertisement
In the financial Statements of Not-for-profit organisations, there is one of the important incomes is Subscription received. we will explain all the concepts related to the income of subscription in NPO. These are shown as the following: -
Subscription in NPO means paying some amount to an Organisation by its member on a regular basis. It can be collected by the Organisation on a monthly, quarterly, or yearly basis. This is the revenue for the Organisation so, it will be credited to the Income and expenditure account. But its treatment depends on the period for which it is received and in which year it is received. It may be received next year or for the previous year in the current year.
The subscription in NPO is treated on the basis of received for the year and received in the year. It is shown in the receipts and payments account and the Incomes and Expenditure account. These both treatments are shown below: -
All the subscriptions received during the year will be Debited in the receipts and payments account, no matter for which year it has been received. That means it may be received for the current year, previous year, or next year(s).
Subscriptions received in the Financial year 2020-21 shown as follows: -
Subscription O/s for 2020-21 Rs 15,000 and Subscription received in advance in 2019-20 Rs 5,000
Calculate the total amount of the Subscription which will be debited to Receipts and Payment A/c: -
| Subscription received for Current Year (2020-21) | 80,000 |
| Add: - subscription received for Previous Year (2019-20) | 10,000 |
| subscription received for Next Year (2021-22) | 8,000 |
| subscription received for Next Year (2022-23) | 5,000 |
| The total amount debited to the receipt and payment account | 1,03,000 |
The subscription outstanding and received in advance will not be treated in the receipts and payment account because we just debited the amount of the subscription in the receipts and payments account which has been received in the current year only.
The amount of subscription received during the year for any year would be debited to In the receipts and payment account, but to the opposite of this In the income and expenditure account, that amount of subscription will be credited which is related to the current year only. It may be received or due but not received.
Subscription received in the Financial year 2020-21 shown as following: -
Subscription O/s for 2020-21 Rs 15,000 and Subscription received in advance in 2019-20 Rs 5,000
Calculate the total amount of the Subscription which will be credited to Incomes and expenditures A/c: -
| Subscription received for Current Year (2020-21) | 80,000 |
| Add - subscription Outstanding for the current year(2020-21) | 15,000 |
| subscription received in advance in the previous year (2019-20) for the current Year (2021-22) | 5,000 |
| The total amount Credited to the Income and Expenditure account | 1,00,000 |
The subscription received for the previous year(2019-20) and received in advance for next year (2021-22 & 2022-23) will not be treated in the income and Expenditure account because we just Credited the amount of subscription in the income and expenditure account which is related to the current year only.
Thanks for reading the topic
please comment your feedback in the comment box whatever you want. If you have any questions please ask us by commenting us
Check out T.S. Grewal's +2 Book 2020 @ Official Website of Sultan Chand Publication
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "What is subscription in NPO - Treatments and Examples:", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Advanced Financial Accounting.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "What is subscription in NPO - Treatments and Examples:" instantly.
13 July 2022
14 August 2022
