Non-profit Organisations
Clubs and societies are bodies formed to provide services, recreation or welfare to their members, not to earn a profit. Examples include sports clubs, residents' associations and cultural societies. Because their aim is not profit, their accounting differs from an ordinary business.
Key Differences
Several terms and statements are replaced with ones suited to a non-profit body:
| Business | Club / Society |
| Capital | Accumulated fund |
| Profit & Loss Account | Income and Expenditure Account |
| Net profit | Surplus |
| Net loss | Deficit |
A club's main source of income is members' subscriptions. Other sources include donations, hall rental and profit from activities such as selling refreshments. A club prepares a Receipts and Payments Account (a summary of the cash book) and an Income and Expenditure Account.
Key idea
A club has no owner. Instead, the members' net worth is represented by the accumulated fund, which plays the same role as capital in a business.
Example
Seri Aman Sports Club received subscriptions of RM6,000, donations of RM500 and canteen profit of RM800. It paid rent and wages. The excess of income over expenditure is called a surplus, not a profit, and is added to the accumulated fund.
Roles and Records
A club is run by a committee, and the treasurer is responsible for keeping the financial records and presenting the statements to members at the annual general meeting. A club's receipts can be split into capital receipts (such as a special donation to construct a building or a life-membership fee) and revenue receipts (such as annual subscriptions and ticket sales). This distinction matters because only revenue items enter the Income and Expenditure Account, while capital items appear in the Statement of Financial Position. Clear records let members judge how their money has been used.
Remember
A club's objective is member welfare, not profit. The words "profit" and "loss" are not used; use "surplus" and "deficit" instead.