Suppose that the subscriptions from members of the Moortown Athletics Club (see above) are for the year to 31 December, but were all received in January, and that the rent of the clubhouse was paid in January for the first three months of the calendar year. There is a stock of publicity materials left at the end of January valued at £5. Amend the receipts and payments account above to turn it into an income and expenditure account. To do this, you will need to adjust the cash flows by the amounts outstanding in order to arrive at the amount which relates to January alone. Life memberships are awkward because they relate to an uncertain future period, i.e.the lives of the relevant members. It will therefore often be regarded as acceptable for the club to account for these wholly in the period when they are received.

You may find this a difficult activity, but, as always, do try it before you look at the answer.