What are the ways to treat Subscriptions in Arrears in a non-profit making organizations

August 3rd, 2011 Comments off
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Two ways of handling them:

(a)    To omit unpaid subscriptions from the Income and Expenditure account and the balance sheet. If the subscriptions are paid at a later date,  they will be credited to the Income and Expenditure account in the year in which RECEIVED ( this method is seldom used)

(b)   To credit all subscriptions due for the year to the Income and Expenditure account whether received or not , and to show subscriptions in arrears in the balance sheet as current assets.  If the arrears are not received in the following year, to write them off in that following year.

The normal way or method is to treat subscriptions as in (b) above.

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Financial Accounting

 
 

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