Clubs and Non Profit Organizations

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Introduction What’s the deal? Clubs are very common establishments in our society. Firstly, before I further explain all the required information, we have to understand that a club operates differently as compared to a normal business/enterprise. The most imperative difference between a business and this sports club is that a business is established with the aim of generating profit which the owner is entitled to because the owner is the person who provides the start-up capital. The low down A sports club on the other hand, it is established to provide facilities to the members and no profit is made. If, through fund raising efforts the club makes, the income generated exceeds the expenses incurred, then that money is called a…show more content…
when the member joins the club for the first time. If entrance fees are capitalised, they will be taken to the ACCUMULATED FUND account and if not, they will entered into the INCOME AND EXPENDITURE account. iii. Sale on Refreshments Often, a club or society may have a specific corner where refreshments and snacks are sold for the convenience of its members. This is not the main activity of the club, yet, is a small trading activity that generates funds for the club. Western Cape Soccer Club prepares a Refreshment Trading Account to account for the profit or loss arising from such an activity. The money that the club receives from this activity will serve as a portion of the income. When the physical refreshments are bought, this is recorded in the REFRESHMENTS ACCOUNT which is an asset account. If there are refreshments left over at the end of the financial period, these have to be recorded in the account called REFRESHMENTS ON HAND and these will be used in the next financial period. Refreshments account will increase on the Debit side and if the refreshments are sold, the account decreases on the Credit side (as it is an asset account). The profit made will be accounted for with a contra-account PROFIT ON SALE OF REFRESHMENTS. I have illustrated how Western Cape Soccer Club will enter the Refreshments Ledger Account: DR
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