The accumulated fund is the club’s equity: assets less liabilities. The closing fund equals the opening fund plus the surplus, or minus a deficit, and it must match the net assets in the statement of financial position.
This lesson belongs to clubs and societies accounts. Before it, check that you can produce a surplus using calculating subscription income.
Worked example: Kelab Bola Sepak Taman Murni
At the start of the year the club had the following balances.
- Assets: cash RM2 000, equipment RM8 000 and inventory RM500, totalling RM10 500.
- Liabilities: creditors RM700.
Opening accumulated fund = 10 500 − 700 = RM9 800.
The income and expenditure account for the year shows a surplus of RM1 950. Closing accumulated fund = 9 800 + 1 950 = RM11 750.
How is the closing statement built?
At the end of the year the balances are as shown. Equipment has been depreciated by RM800.
| Statement of financial position | RM |
|---|---|
| Equipment (8 000 − 800) | 7 200 |
| Inventory | 600 |
| Subscriptions in arrears | 250 |
| Cash and bank | 4 300 |
| Total assets | 12 350 |
| Less: creditors | 450 |
| Less: subscriptions in advance | 150 |
| Net assets | 11 750 |
| Accumulated fund: opening 9 800 plus surplus 1 950 | 11 750 |
The two sides agree at RM11 750, which proves the surplus and the balances are consistent.
The mistake that costs marks
The slip is to add the RM1 950 surplus to the cash balance and leave the accumulated fund at RM9 800. The cash is already in the assets, so the statement then double counts.
| Line | Wrong | Right |
|---|---|---|
| Accumulated fund | 9 800 | 11 750 |
| Cash and bank | 6 250 | 4 300 |
The fix is to give the surplus one home, in the accumulated fund.
What if the club has a deficit?
The deficit is subtracted from the accumulated fund. If the opening fund is RM5 000 and the deficit is RM800, the closing fund is 5 000 − 800 = RM4 200.
The net assets in the statement of financial position must equal this RM4 200.
Check yourself
A club has opening assets of RM6 000 and opening liabilities of RM1 000. The year ends with a deficit of RM800. Find the opening and closing accumulated fund.
Answer
Opening accumulated fund = 6 000 − 1 000 = RM5 000.
Closing accumulated fund = 5 000 − 800 = RM4 200.
The net assets at year end must also equal RM4 200.
What to study next
Test the whole chapter on the clubs and societies practice set. For a teacher to go through your statements, see online one-to-one Accounting tuition.