Q.From the Receipts and Payments Account of a club for the year ended 31st March 2025, subscriptions received during the year amounted to ₹85,000. Additional information: Outstanding subscription on 1.4.2024 ₹4,000; Outstanding subscription on 31.3.2025 ₹6,000; Subscription received in advance on 1.4.2024 ₹2,500; Subscription received in advance on 31.3.2025 ₹3,000. Calculate the amount of subscription to be credited to the Income and Expenditure Account for the year ended 31.3.2025.

Cash received must be adjusted for amounts that belong to a different year before it can be shown as this year's income.

Step 1 — Apply the formula.

Subscription for the year = Received during the year + Outstanding at end − Outstanding at beginning + Advance at beginning − Advance at end

= 85,000 + 6,000 − 4,000 + 2,500 − 3,000

= 91,000 − 4,000 + 2,500 − 3,000

= 87,000 + 2,500 − 3,000

= 89,500 − 3,000

= ₹86,500

Step 2 — Cross-check with a Subscription Account.

Both sides total ₹93,500 once the transfer to the Income and Expenditure Account is taken as ₹86,500, which independently confirms Step 1.

Alternative check via the Subscription Account ledger (shown in the working above) — posting the four adjustment figures and taking the transfer to the Income and Expenditure Account as the balancing figure must give the same ₹86,500 as the direct formula.

A frequent slip is adding the opening outstanding and subtracting the closing outstanding (the signs are the reverse of the correct rule), or forgetting the advance-subscription adjustment altogether when a question gives both outstanding and advance figures.