Subscriptions are the main income of most clubs, and the income for the year is the amount earned for that year, not the cash received. To find it, adjust the cash for arrears and advance payments at the start and end of the year.
This is the first adjustment in the clubs and societies module, and it uses the same logic as accruals and prepayments.
Why does the cash figure need adjusting?
Some members pay late and some pay early. A subscription paid in 2025 for 2024 is not 2025 income. A subscription paid in 2025 for 2026 is not 2025 income either.
Only the subscriptions that relate to 2025 are 2025 income.
Four balances drive the adjustment: opening arrears, opening advance, closing arrears and closing advance. Each one moves the cash figure in a fixed direction.
How do you work it out step by step?
- Write the cash received during the year.
- Add the opening advance. It was received last year but is earned this year.
- Subtract the opening arrears. It was received this year but belongs to last year.
- Subtract the closing advance. It was received this year but belongs to next year.
- Add the closing arrears. The club earned it this year but has not been paid.
- Check with a subscriptions account, where debits and credits must total the same.
Worked example
Lakeview Drama Society, year ended 31 December 2025. Cash received for subscriptions was RM4,860.
At 1 January 2025, members owed RM150 (for 2024) and had paid RM90 in advance (for 2025). At 31 December 2025, members owed RM210 for 2025 and had paid RM120 in advance for 2026.
Step 1, cash received: 4,860.
Step 2, add opening advance: 4,860 + 90 = 4,950.
Step 3, subtract opening arrears: 4,950 − 150 = 4,800.
Step 4, subtract closing advance: 4,800 − 120 = 4,680.
Step 5, add closing arrears: 4,680 + 210 = 4,890.
Subscriptions account check:
| Debit | RM | Credit | RM |
|---|---|---|---|
| Balance b/d (arrears) | 150 | Balance b/d (advance) | 90 |
| Income and expenditure | 4,890 | Cash received | 4,860 |
| Balance c/d (advance) | 120 | Balance c/d (arrears) | 210 |
| Total | 5,160 | Total | 5,160 |
Both sides total RM5,160, so the figure of RM4,890 is confirmed. In the statement of financial position, the RM210 is a current asset and the RM120 a current liability.
The mistake to watch for
A common slip is to reverse every sign. The student reasons that opening arrears is “money owed to us”, so it should be added.
Mistaken answer: 4,860 + 150 − 90 + 120 − 210 = RM4,830.
The answer is RM60 too low because all four adjustments point the wrong way.
The correction is to ask what each balance means. Opening arrears was last year’s income, so it must be taken out of this year’s cash. Closing arrears is earned this year, so it must be added in.
Using the account layout stops the sign confusion.
Check yourself
Try these, then open each answer.
1. Cash received was RM3,000. Opening arrears were RM100 and closing arrears were RM180. There were no advances. Find the income.
Show answer
3,000 − 100 + 180 = RM3,080.
2. Cash received was RM2,400. Opening advance was RM60 and closing advance was RM40. There were no arrears. Find the income.
Show answer
2,400 + 60 − 40 = RM2,420.
3. Cash received was RM2,950. Opening arrears RM80, opening advance RM30, closing arrears RM120, closing advance RM50. Find the income and check it with the ledger totals.
Show answer
2,950 + 30 − 80 − 50 + 120 = RM2,970. Debit side: 80 + 2,970 + 50 = 3,100. Credit side: 30 + 2,950 + 120 = 3,100. They agree.
Where this leads next
After subscriptions, move on to calculating an event surplus. The double-entry and ledger trainer shows how the subscriptions account links to cash and to the income and expenditure account.
If the signs keep slipping under time pressure, a teacher can watch your working and spot the exact step where it turns. That is a regular part of our online one-to-one Accounting tuition.