Discy Latest Questions

Natalia Alva
  1. This answer was edited.

    Outstanding Subscription Example- XYZ Club has 1200 members each paying a monthly subscription of 100. As on 31st March, Subscription due (or) outstanding subscription amounted to 25,000. Journalise the following transactions for subscription due and received in the books of XYZ Club. In the books oRead more

    Outstanding Subscription

    Example- XYZ Club has 1200 members each paying a monthly subscription of 100. As on 31st March, Subscription due (or) outstanding subscription amounted to 25,000. Journalise the following transactions for subscription due and received in the books of XYZ Club.

    In the books of XYZ Club

    DateParticularsL.F.AmountNature of AccountAccounting Rule
    31st MarchOutstanding Subscription a/c  Dr25,000Representative PersonalDebit– The Receiver
     To Subscription a/c 25,000NominalCredit– All Incomes and Gains

    (Being Subscription due as on 31st March)

    DateParticularsL.F.AmountNature of AccountAccounting Rule
    1st AprilCash/Bank a/c  Dr25,000RealDebit– What comes into the business
     To Outstanding Subscription a/c 25,000Representative PersonalCredit– The Giver

    (Being Subscription received)

    Accounting Treatment

    Oustanding subscription is treated as an asset to the organization and shown in the asset side of the balance sheet. It is added to the subscription and recorded on the Income side of Income and Expenditure account. It is also termed as Subscription in areas (or) Subscription due.

    Modern Accounting Approach

    We will record the same transaction by following the modern rules of accounting.
    In the books of XYZ Club

    DateParticularsL.F.AmountNature of AccountAccounting Rule
    31st MarchOutstanding Subscription a/c  Dr25,000AssetDebit– The Increase in Asset
     To Subscription a/c 25,000IncomeCredit– The Increase in Income

    (Being Subscription due as on 31st March)

    DateParticularsL.F.AmountNature of AccountAccounting Rule
    1st AprilCash/Bank a/c  Dr25,000AssetDebit– The Increase in Asset
     To Outstanding Subscription a/c 25,000AssetCredit– The Decrease in Asset

    (Being Subscription received)

    See less
    • 1