Q.From the following information, calculate the amount of Subscription to be credited to the Income and Expenditure Account for the year ended 31st March, 2024: Subscription received during the year 2023-24: Rs 60,000
Subscription outstanding on 1st April, 2023: Rs 5,000
Subscription received in advance on 1st April, 2023 (for 2023-24): Rs 2,000
Subscription outstanding on 31st March, 2024: Rs 7,000
Subscription received in advance on 31st March, 2024 (for 2024-25): Rs 3,000

This is the standard adjustment every Not for Profit concern's final accounts must apply before the cash actually received during the year can be shown as this year's genuine subscription income.

Subscription income for the current year is found by adjusting the amount actually received in cash for whatever is outstanding or received in advance, at both the beginning and the end of the year:

Subscription for the year = Amount received during the year + Outstanding at the end of the year − Outstanding at the beginning of the year + Advance received at the beginning of the year − Advance received at the end of the year

Substituting the given figures:

= Rs 60,000 + Rs 7,000 − Rs 5,000 + Rs 2,000 − Rs 3,000

= Rs 60,000 + Rs 7,000 = Rs 67,000

= Rs 67,000 − Rs 5,000 = Rs 62,000

= Rs 62,000 + Rs 2,000 = Rs 64,000

= Rs 64,000 − Rs 3,000 = Rs 61,000 …

The same figure can be reached with a memorandum Subscription Account: debit side = Opening outstanding (Rs 5,000, b/d) + amount transferred to Income and Expenditure A/c (balancing figure) + Closing advance (Rs 3,000, c/d); credit side = Opening advance (Rs 2,000, b/d) + Amount received during th …

The most common slip is getting the signs the wrong way round — adding the opening outstanding instead of subtracting it, or subtracting the opening advance instead of adding it. Always reason from first principles: does this item belong to a PAST year (subtract if outstanding, add if advance) or does it relate to …