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Natalia Alva

What is the journal entry for outstanding subscription?

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  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 of XYZ Club

    Date Particulars L.F. Amount Nature of Account Accounting Rule
    31st March Outstanding Subscription a/c  Dr 25,000 Representative Personal Debit– The Receiver
     To Subscription a/c  25,000 Nominal Credit– All Incomes and Gains

    (Being Subscription due as on 31st March)

    Date Particulars L.F. Amount Nature of Account Accounting Rule
    1st April Cash/Bank a/c  Dr 25,000 Real Debit– What comes into the business
     To Outstanding Subscription a/c  25,000 Representative Personal Credit– 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

    Date Particulars L.F. Amount Nature of Account Accounting Rule
    31st March Outstanding Subscription a/c  Dr 25,000 Asset Debit– The Increase in Asset
     To Subscription a/c  25,000 Income Credit– The Increase in Income

    (Being Subscription due as on 31st March)

    Date Particulars L.F. Amount Nature of Account Accounting Rule
    1st April Cash/Bank a/c  Dr 25,000 Asset Debit– The Increase in Asset
     To Outstanding Subscription a/c  25,000 Asset Credit– The Decrease in Asset

    (Being Subscription received)

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