What is the club’s main source of income?
A major part of the club’s income is Membership fees. This is a fee paid by members. It is paid annually at R100 for juniors and R250 for adults. The Membership fees is a fixed amount so that along with additional income it covers the clubs expenses. There are usually Membership fees outstanding as well as people who pay in advance.
Entrance fees is also a part of the clubs income. This is paid by new members who join the club. This fee is only paid once and stands at R200 for juniors and R400 for adults.
The club also has a tuck-shop that sells refreshments as well as a coffee bar
The club also has a shop that sells jerseys and socks.
The club also gets money if they win a tournament.
What are the club’s main items of expenditure?
As the club enters tournaments it has to pay Affiliation fees. The club has to pay these fees to compete against other teams in the area. This fee is paid to the organising body.
The club also has to pay Honorarium. This is paid to people who have delivered a service to the club. E.g. secretary or treasurer.
The club also spends money on refreshments.
Water and electricity.
Medical equipment such as first aid kits.
Travelling expenses when the team plays somewhere.
Maintenance of the building ( paint, varnish etc ).
What recording systems does the club use to record incomes and expenses?
Usually a simple system of bookkeeping is followed.
Distinguish clearly between receipts and income. Receipt are all monies that are received which include all cash transactions, irrespective of the related period or the nature thereof. Income refers to the amounts received or receivable i.e. earned while conducting our business. Examples are membership fees, donations, sale of refreshments or discount received. Income is a gain for the club and will therefore increase the surplus. When we sell an asset it is not regarded as an income. Income accounts are entered on the Credit side of the Nominal section of the General Ledger. Next we;
Distinguish between payments and expenditure. Payments are all monies paid in cash, cheque, postal order or direct transfer. Expenditure refers to the amounts paid or payable e.g. wages, rent expenses, interest expenses, stationery etc. These expenses are incurred while running the club and are necessary in order to generate income. They are either used up quickly or have no lasting income e.g. electricity. Expenses are a loss to the club and therefore decrease the surplus.
In this club an Income and Expenditure statement and a Balance Sheet is made. Ledger accounts are also opened. A Cash Receipts journal, a Cash Payments journal and a General Journal is used. Daily and monthly, receipts are issued and recorded in journals then in the general ledger then in the trial balance. At the end of the financial year adjustments are made, a post adjustments trail balance is drawn up, closing entries are made, an Income and Expenditure account is drawn up, a post closing trail balance is drawn up and finally an Income and Expenditure Statement Balance Sheet is drawn up.
Unlike in a business, a surplus or deficit is made not a profit or a loss.
What control measures are in place in the keeping of the ledgers?
There must be accurate bookkeeping entries of all receipts and payments.
There must be proper control over all cash receipts and payments.
There must be proper documentation of all transactions.
Periodically, as a rule annually, financial statements must be presented to the members.
What is the club’s policy regarding membership fees?
Membership fees are collected at the beginning of the financial year. Any membership fees that are not received are recorded as an accrued income. Sometimes members pay membership fees for the next year and this is recorded as income received in advance.
If you have accrued income from the previous...
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