Cambridge Syllabus Notes

5.4 Clubs and Societies

Think of your club as a mini‑business. You sell refreshments, run a subscription service, or host events. Your job is to keep track of money coming in and going out, just like a lemonade stand, but with more paperwork. 🎉

1. Identify Revenue Streams

Refreshments sold at meetings
Membership subscriptions (annual fee)
Event ticket sales
Merchandise (t‑shirts, mugs)

2. Record Transactions

When you sell a coffee, record a debit to Cash and a credit to Sales.
When a member pays the annual fee, debit Cash and credit Membership Income.
Keep receipts and invoices in a logbook or spreadsheet.

3. Prepare the Income Statement

Revenue	Expense	Net Income
$5,000 (Refreshments)	$1,200 (Coffee beans, cups)	$3,800
$2,000 (Subscriptions)	$300 (Printing membership cards)	$1,700

4. Prepare the Balance Sheet

Assets	Liabilities & Equity
Cash $6,000	No liabilities
Equipment (coffee machine) $1,500	Equity $1,500

5. Closing the Books

At the end of the year, transfer the net income to the club’s equity account. This keeps the books tidy and ready for the next cycle.

Exam Tip: Remember that revenues are recorded when earned, not when cash is received. Use the matching principle to pair expenses with the revenue they help generate. 📚

Quick Check: If your club sold 200 cups of coffee at $2 each, what is the total revenue?
Answer: $400.
Formula: $200 \times 2 = 400$

Common Mistake: Forgetting to credit the correct revenue account can lead to a misstated income statement. Double‑check that every debit has a matching credit. ⚠️

prepare accounts for revenue-generating activities, e.g. refreshments, subscriptions