A local group collects subscriptions from its members, and also has to pay 60% of them to central funds. In the year to 31 December 20X8 the group receives:
For 20X7 ........................... €20
For 20X8 ........................... €60
For 20X9 ........................... €10
It pays to central funds in that year:
For 20X7 ........................... €12
For 20X8 ........................... €30
For 20X9 ........................... nil
Required:
(a) Produce a summary of the subscription position for the group for the year 20x8, on:
(i) A receipts and payments basis
(ii) A revenue and expenses basis.
(b) Outline the advantages and disadvantages of each basis with reference to appropriate accounting conventions. Give the group leader your recommended method, with reasons. Discuss also any difficult decisions you have to make in deciding your answer to (a) above.