Subscriptions Account

Exam code: 7707

Written by: Ashika|Reviewed by: Caroline Carroll|Updated 2 July 2026

Subscriptions accounts

What is a subscriptions account?

A subscriptions account is prepared to show the amount of subscriptions that relates to the financial year
- This amount is then transferred to the income and expenditure account
Subscription is an income and is treated in the same way as income accounts of trading businesses are treated

What is the layout of a subscriptions account?

The subscriptions account looks very similar to any other income account
The account may have two balances
- A debit balance for subscriptions in arrears
  - This amount is still owed to the organisation
  - Therefore it is an asset
- A credit balance for subscriptions paid in advance
  - This amount has been paid for future services which the organisation must provide
  - Therefore it is a liability
There might be irrecoverable debts that have been written off
- The amount would be credited to the subscriptions account

Worked example

The Batters is a baseball club. Members pay a monthly subscription of $10 per month to use the facilities and equipment. The treasurer wants to know the amount to be transferred to the income and expenditure account for the year ended 31 December 2023. The following information was provided:

1 December 2022, nine members paid in advance for the month of January 2023
31 January 2023, six members paid the amount owing for month of December 2022
31 December 2023, eight members owe the month of December 2023
16 December 2023, two members paid in full for the year ending 31 December 2024
Received $3 730 in total from members for subscriptions during the year ended 31 December 2023

Prepare the subscription account for the year ended 31 December 2023. Bring down the balance on 1 January 2024.

Answer:

Deal with each piece of information separately and identify which side to enter the amount

1 December 2022, nine members paid in advance for January 2023
- This is a prepayment from the previous year
- This is the opening balance on the credit side

9 × $10 = $90

31 January 2023, six members paid the amount owing for December 2022
- This is an accrual from the previous year
- This is the opening balance on the debit side

6 × $10 = $60

31 December 2023, eight members owe the month of December 2023
- This is an accrual for this year
- This is the opening balance on the debit side for next year
- Therefore the balance c/d is on the credit side

8 × $10 = $80

16 December 2023, two members paid in full for the year ending 31 December 2024
- This is a prepayment for the next year
- This is the opening balance on the credit side for next year
- Therefore the balance c/d is on the debit side

2 × 12 × $10 = $240

Received $3 730 in total from members for subscriptions during the year ended 31 December 2023
- This is the amount received
- Enter this on the right side
Calculate the amount to transfer to the income and expenditure account
- You can find the balancing figure for the account
- Alternatively, you can calculate it from the information by
  - adding amounts which are due this year
  - and subtracting amounts that are not due this year
- Start with the amount received for the year
  - Subtract the accrual from last year
  - Add the prepayment from last year
  - Add the accrual at the end of this year
  - Subtract the prepayment at the end of this year

$3 730 - $60 + $90 + $80 - $240 = $3 600

Enter the details into the account

The Batters Subscriptions Account
Date	Details	$	Date	Details	$
2023 Jan 1	Balance b/d	60	2023 Jan 1	Balance b/d	90
Dec 31	Income and expenditure	3 600	Dec 31	Bank	3 730
Dec 31	Balance c/d	240	Dec 31	Balance c/d	80
		3 900			3 900
2024 Jan 1	Balance b/d	80	2024 Jan 1	Balance b/d	240