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Chapter 36 Receipts and payments accounts and income and expenditure accounts Activity 36.3 Does this policy of ignoring subscriptions due when preparing the financial statements comply with the prudence concept? Why/Why not? In an examination, you should assume that subscriptions owing are to be brought into the financial statements, unless instructions to the contrary are given. Exhibir 36.3 shows an instance where subscriptions in arrears and in advance occur at the beginning and end of a period. Exhibit 36.3 An amateur theatrical group charges its members an annual subscription of 20 per member. It accrues for subscriptions owing at the end of each year and also adjusts for subscriptions received in advance. (A) On 1 January 20X2, 18 members had not yet paid their subscriptions for the year 20X1. (B) in December 20X1, 4 members paid 80 for the year 20X2. (C) During the year 20X2 it received 7,420 in cash for subscriptions: f For 20X1 360 For 20X2 6,920 For 20X3 140 7,420 (D) At 31 December 20X2, 11 members had not paid their 20X2 subscriptions Subscriptions