Prepare club income and expenditure and accumulated fund
Prepare club accounts for subscriptions and revenue activities, and separate capital items from the period surplus.
Cambridge IGCSE Accounting 0452 / (9–1) 0985, 2027–2029 Version 1. These lessons follow the 2027–2029 syllabus only; the separate 2026 syllabus update is not yet mapped. Written practice is self-checked, not an official Cambridge grade. Full timed-paper practice and human subject-teacher review remain pending.
Before you begin
- No previous accounting study is assumed. Keep the business, transaction and accounting period in view, and distinguish a resource, a claim and a performance result.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
A club's income exceeds its expenditure. What is the result called?
What you will learn
- Prepare receipts and payments and income and expenditure accounts
- Account for revenue-generating club activities
- Calculate accumulated fund from opening fund and surplus
Prepare both accounts with the right basis
The receipts and payments account lists cash receipts and payments, including equipment purchased or sold, and reconciles opening and closing cash/bank.
The income and expenditure account includes earned subscriptions and activity income, less period expenses. For refreshments, compare sales with the cost of refreshments sold; exclude closing stock from current-period cost where supplied. Record equipment as an asset and charge depreciation when the question provides it.
Close the fund balance
A club's accumulated fund represents its accumulated resources after liabilities, rather than a profit belonging to a shareholder. Closing accumulated fund = opening accumulated fund + surplus − deficit, adjusted for any stated capital contributions or other fund movements.
The statement of financial position reports the club's assets and liabilities, including cash/bank, inventory, equipment net of depreciation, subscriptions receivable and amounts owed.
Pause and explain
Opening accumulated fund is $18,000 and the year's surplus is $2,700. There are no other fund movements. Find the closing fund.
Worked example
A club opens with cash $1,500, receives subscriptions $10,000 and refreshment sales $2,800, and sells old equipment for $700. It pays utilities $1,200, buys refreshments $1,400 and buys equipment $2,000. Calculate closing cash. If adjusted subscription income is $9,500 and there is no closing refreshment stock or equipment depreciation, calculate surplus when utilities are the only other expense.
Show the worked solution
- Cash receipts total = 10,000 + 2,800 + 700 = $13,500; opening cash is $1,500.
- Payments total = 1,200 + 1,400 + 2,000 = $4,600; closing cash = 1,500 + 13,500 − 4,600 = $10,400.
- Surplus = subscription income 9,500 + refreshment income 2,800 − refreshment cost 1,400 − utilities 1,200 = $9,700. Equipment purchase and disposal proceeds are capital cash items, not operating income/expense here.
Answer Closing cash $10,400; income and expenditure surplus $9,700. Equipment purchase/sale belongs in receipts and payments and the asset records, not as ordinary income or expense.
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Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
Opening accumulated fund is $24,000. The club records surplus $3,800, receives a restricted capital donation $2,000 and has no other fund changes. Calculate closing accumulated fund if the donation is included as a fund contribution.
Give me a hint
Add the period surplus and the stated contribution to the opening fund.
Compare my reasoning
- Closing fund = 24,000 + 3,800 + 2,000.
- Closing accumulated fund = $29,800.
- Show the donation separately if the question requires a distinct fund reserve.
Closing accumulated fund is $29,800, including the stated $2,000 capital contribution.
Look for these in your work
- Surplus added
- Contribution added
- Presentation qualified
A club earns subscription income $11,400 and refreshments revenue $3,200. Refreshment costs are $1,750 and expenses are utilities $1,300 and insurance $450. Calculate the surplus.
Give me a hint
Include activity revenue and its direct cost, then deduct period expenses.
Compare my reasoning
- Refreshment surplus contribution = 3,200 − 1,750 = $1,450.
- Total income = 11,400 + 3,200 = $14,600; total expenditure = 1,750 + 1,300 + 450 = $3,500.
- Surplus = 14,600 − 3,500 = $11,100.
Income and expenditure surplus is $11,100.
Look for these in your work
- Revenue included
- Expenses included
- Surplus correct
A club has equipment at cost $9,000 and accumulated depreciation $3,600, inventory $400, bank $6,800, subscriptions receivable $500 and payables $1,100. Calculate net assets and explain their link to accumulated fund.
Give me a hint
Use equipment net book value and subtract liabilities from assets.
Compare my reasoning
- Equipment net book value = 9,000 − 3,600 = $5,400.
- Total assets = 5,400 + 400 + 6,800 + 500 = $13,100.
- Net assets = 13,100 − 1,100 = $12,000, which should agree with the accumulated fund and any other specified fund balances.
Net assets are $12,000. The statement of financial position's net assets reconcile to accumulated fund and other stated funds.
Look for these in your work
- Net book value correct
- Assets total correct
- Fund relationship explained
Common mistakes
- Including equipment purchases as an income-and-expenditure expense in full
- Treating disposal proceeds as ordinary activity income
- Ignoring the cost of refreshments sold
- Calling accumulated fund share capital
What can you explain now?
Where is an equipment purchase recorded in a club's cash summary?
Compare with the explanation
Receipts and payments
The cash account records the payment even though equipment is an asset in the position statement.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
How does a club's accumulated fund differ from a company's share capital?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.