The subscription actually collected in cash mixes amounts belonging to last year, this year, and next year, so it must be converted onto the accrual basis before being shown as income.

Working: ₹1,20,000 − ₹8,000 (opening outstanding) + ₹12,000 (closing outstanding) − ₹7,000 (closing advance) + ₹5,000 (opening advance) = ₹1,22,000.

Step 1 — Set up the adjustment working.

Step 2 — Compute. 1,20,000 − 8,000 = 1,12,000; + 12,000 = 1,24,000; − 7,000 = 1,17,000; + 5,000 = 1,22,000.

Step 3 — Balance Sheet treatment. The closing outstanding subscription of ₹12,000 will appear as an asset, and the closing advance subscription of ₹7,000 will appear as a liability, in the Balance Sheet as at 31.3.2024.

Cross-check using a memorandum Total Subscription Account: Debit side — Balance b/d (opening outstanding) ₹8,000, Income and Expenditure A/c (balancing figure) ₹1,22,000, Balance c/d (closing advance) ₹7,000, total ₹1,37,000. Credit side — Balance b/d (opening advance) ₹5,000, Cash/Bank received ₹1,20,000, Balance c/d (closing outstanding) ₹12,000, total ₹1,37,000. Both sides agree at ₹1,37,000, confirming ₹1,22,000 is correct.

A common mistake is adding the opening outstanding subscription instead of subtracting it, or forgetting to add back the opening advance subscription — both errors change the answer by the same amount as the ignored figure. Always write out all four adjustment lines rather than combining them mentally.