WAEC Accounting 2017 Theory — Question 7

Model answer

(i) Accumulated fund: This can be defined as the equivalence of capital in a profit making organization. It is the difference between total assets and total liability. (ii) Subscription in arrears: This can be defined as the periodic payment of members of a not-for-profit-making organization to the organization in form of dues which are yet to be paid. (iii) Receipts payment account: This is the cash book equivalent of a profit making organisation. It is used to record only cash payment and receipt to record all arrears and prepared after appropriate adjustment. (iv) Income and expenditure account: This is the equivalent of profit and loss of a profit making organisation. It is used to record all revenue income and expenditure of the association, prepared on an accrual basis. (v) Entrance fees: This is a one-off payment made by a new member on joining a club or association, distinct from the regular subscription fee.