Tips on Book Keeping and Reporting on the Club Financial Affairs
The accounting procedures to be followed: 1. Documents must be issued or obtained for the various transactions. Receipts must be issued for all cash receipts, for membership fees a receipt issued separately to each member. The amounts deposited must correspond with the receipts issued, for payments the necessary purchase vouchers must be submitted and each payment should be authorised by two persons if a current account is kept two persons usually the secretary and the chairman. When only a savings account is kept as is often the case, the withdrawal slip must be signed jointly by two authorised persons.
2. The documents the transactions are entered in the appropriate journals. These journals will entail the following, the Cash Receipts Journal, the Cash Payments Journal and the General Journal. Sometimes a petty Cash Journal is also used. As the transactions of a club are usually not so voluminous the journals are closed off annually at the end of the accounting period.
3. The journals posting is done to the ledger, accounts are cast and pencil footings written in. A trial balance is extracted to test the posting and arithmetical correctness of the work. At the end of the accounting period the necessary journal entries are made for the adjustments and posted. A post adjustment trial balance is prepared.
4. The closing journal entries are made and posted, in the case of clubs posting is done to an income and expenditure account in which the surplus or deficit is calculated and posted. Income and expenditure account is closed off to the accumulated fund account instead of the capital account. A post closing trial balance is extracted. The financial statements are drawn up.
Depending on the size of the club and the volume of the transactions, the above mentioned procedures are often departed from as a short cut can be followed to attain the final result to report to the members. Instead of working according to a complete system of book keeping with all the ledger accounts as described in the paragraph on accounting procedures, clubs often write up only Cash Receipts and Payments Journals or an analysis cash book and then prepare the financial statements for the members from the information found in them. First of all it is necessary to note how an analysis cashbook is adapted for recording the transactions of clubs. In analysis cash book the bank account is kept in the cash book itself. Suitable analysis columns are used to enter the various receipts and expenses and the total of each column is found. At clubs the cash book is closed off only at the end of the year, from the Cash Book a summary of the receipts and payments can be made for the year.
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