(i) Subscription : Subscription is an agreement to be a part of an Association , Club etc. The member has to pay a fixed amount at regular interval to remain as a part of the Club Association. There are two ways of computing Subscription for the Current Accounting Year :
- Statement Method
- Account Method
Subscription will be Treated as Liability , if :
- It is of Non-recurring Nature.
- It is Received for Certain Specific Purpose such as :
– Subscription for Tournament Fund
– Subscription for Governor’s Party
– Subscription for Building Fund
– Subscription for Construction of Science Block .
(ii) Life Membership Fees : It is a Capital Receipt , Irregular in Nature received once from the Member throughout His / Her Life. It is Capitalized and Shown at the Liabilities Side .
(iii) General Donation : General Donation can be classified as :
– General Donation of Big Amount . It is a Donation of Non
– Recurring Nature. So it should be Capitalized and Shown at the Liabilities Side of the Balance Sheet .
– General Donation of Small Amount . This Donation is of a Recurring Nature . It is expected that such Donation will be Received every year. It is a Revenue Receipt and it should be treated as Income and Recorded at the Income Side of Income and Expenditure Account .
(iv) Specific Donation : Specific Donations are the ones received for Certain Specific Purpose . It is a Capital Receipt and should be Capitalized and Posted at the Liabilities Side of the Balance Sheet . These Specific Donations may be for Tournament Fund , Construction of Building Hall, Lawn, Pavilion, Library or Governor’s Party etc.
(v) Legacy : It is the Amount Received from Individuals Received as Per Will . It is a Receipt of Non – Recurring Nature. So it should be Capitalized and Shown on the Liabilities Side . It is shown at the Debit Side of Receipts and Payment Account . It does not matter , whether the Legacy is of Small Amount or Big Amount .
