Q.There are 500 members in a club each paying ₹ 100 as annual subscription. Subscription due but not received for the current year is ₹ 200. Subscription received in advance is ₹ 300. Find out the amount of subscription to be shown in the income and expenditure account.

Subscription for the year = 500 members × ₹100 = ₹50,000, so option (b) is correct.

In the Income and Expenditure Account we show the subscription earned for the current year, not the cash actually received. When every one of the 500 members pays an annual subscription of ₹100, the amount earned for the year is fixed:

500 × ₹100 = ₹50,000.

The extra data given are distractors here, because the ₹50,000 already represents the full year's income for all 500 members:

• Subscription due but not received (₹200) is part of this ₹50,000 (income earned, cash still to come). …