A member of a club paid N1,000 as is subscription for 1993 and N1,200 as subscription for 1992. If the financial year of the society ended on 31st December 1993, the N1,200 subscription will be treated in the balance sheet as

  • A current asset
  • B current liability
  • C capital
  • D profit
jamb 1995accounting

The correct answer is B. current liability

Subscriptions are amounts paid by members periodically to maintain their membership in a club or society.

In this case, the N1,200 subscription for 1992 was paid in advance for the membership period of 1992.

Since the financial year of the society ended on 31st December 1993, the N1,200 subscription for 1992 will still be outstanding at the end of the financial year.

Always note that outstanding subscriptions  are treated as current liabilities in the balance sheet

Previous question Next question