This is the major source of revenue income of a non-trading institution. Subscriptions are the amounts paid by the members of such entity to maintain their membership. Subscriptions may be paid periodically (usually on yearly basis) or as a lump sum for life- membership. Periodical subscriptions are treated as revenue receipts, whereas life membership subscriptions are usually treated as capital receipts and, thus, are transferred to the Capital Fund. The Receipts and r45 Payments Account records the amount of actual subscriptions received while the Income and Expenditure Account records only the subscriptions which relate to the accounting period, whether received or not. Adjustments may, therefore, be required to be made to find out the actual amount of income from subscription. The following illustration is being given to clarify this point: Illustration From the following extracts of Receipts and Payments Account and the additional information, you are required to calculate the Income from Subscriptions for the year ending 31 December, 1997 and show them in the Income and Expenditure Account, and the Balance Sheet of a Club RECEIPTS AND PAYMENTS ACCOUNT FOR THE YEAR ENDING 31ST DECEMBER 1997 Dr Receipts Cr. Rs. Rs. Payments To Subscriptions 1996 5,000 1997 30,000 1998 6,000 41,000 Additional Information (i) Subscription outstanding on 31.12.96 Rs. 6,000 (ii) Subscription outstanding on 31.12.97 Rs. 5,000 Subscription received in advance on 31.12.96 Rs. 6,000