Monday, 18 February 2013

Accounting Entries for membership fees, subscriptions, enterance fee and life membership fees

1 comment

 Another signifi cant difference between these organizations and the trading organization is that their income is mainly derived from their members in membership fees. Different organizations have different membership schemes but the most common are as follows.

Accounting for Annual membership fees

This type of scheme requires members to pay a fee annually in order to retain membership. In accounting terms, this normally coincides with the date for preparing the annual fi nancial statements, but care must be taken to adjust appropriately for subscriptions in advance (a liability) and for subscriptions in arrears (an asset). If a member has outstanding subscriptions it is unlikely that legal action will be taken to recover them (because of the legal costs involved and the diffi culty of proving the debt), so it is common for them to be written off as a bad debt. However, each organization will have its own policy.
These are fees payable in addition to the annual subscription when a person fi rst joins the organisation as a member (they may also be referred to as joining fees). For accounting purposes they are normally considered to relate to the number of years and credit is taken for them gradually in the income and expenditure statement. The time period used is a matter for the organisation to decide but, for example, if a period of 5 years were used and the entrance fee paid were $50, then $10 would be treated as revenue in each of the 5 year’s; income and expenditure statements following the admission to membership.



Socialize It →
Subscribe Us by Email and Get Free Updates

Other Interesting Posts :

1 comment :

  1. In accounting terms, this normally coincides with the date for preparing the annual fi nancial statements,studi dottori commercialisti

    ReplyDelete

© 2014 All Rights Reserved.
Learn Accounting Online & Powered By BloggerHero