Income and expenditure account questions and answers

A new club’s year every time: prepare its accounts and check every figure.

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    How answers are marked
    • Amounts are whole and must be exact. Commas and the currency sign are fine.
    • For a list (receipts, payments, assets, liabilities, income, expenditure), choose the item and type its amount. The lines can be in any order.
    • In a ledger account, type each amount in the debit or the credit box of its line, and leave the other box empty.
    • A line that is taken off, such as closing stock, bar wages or depreciation, is right typed plain, in brackets or with a minus.
    • A loss on the bar, a deficit, or working capital below nil needs brackets or a minus.
    • A total that follows from your own wrong figures above is marked not yet, with a note that the method is right.
    • In the WAEC income and expenditure account both excess lines are there: leave the one that does not apply empty.

    Answers are saved on this device as you type.

    How the problems are made

    Each problem is an invented club’s year, worked out so that every account and statement agrees. Level 1 is the receipts and payments account and the accumulated fund at the start; level 2 the subscriptions account; level 3 the bar creditors and bar trading accounts; level 4 the exam question, from the receipts and payments account to the income and expenditure account and balance sheet; level 5 the subscriptions, rent and salaries accounts. The Cambridge setting uses dollars and IGCSE words: café, inventory, trade payables, surplus or deficit.

    A worked answer: set EXS226

    Sunrise Table Tennis Club’s income and expenditure account for the year ended 31 December 2024 (WAEC layout, the debit side first).

    Dr: Expenditure₦
    Salaries and wages527,000
    Rent219,000
    Electricity97,000
    Insurance45,000
    Secretary’s expenses43,000
    General expenses28,000
    Depreciation of equipment680,000
    Excess of income over expenditure473,000
    Total2,112,000
    Cr: Income₦
    Subscriptions1,900,000
    Profit on bar212,000
    Total2,112,000

    Subscriptions: ₦105,000 paid in advance last year, plus ₦1,704,000 paid this year for this year, plus ₦91,000 still owing, is ₦1,900,000. Profit on bar: sales ₦1,230,000, less cost of sales ₦926,000, less bar wages ₦92,000, is ₦212,000.

    Open set EXS226 to fill in the whole problem yourself.

    Questions

    What is the difference between a receipts and payments account and an income and expenditure account?

    A receipts and payments account summarises the cash book: every amount received and paid in the year, of any kind, starting and ending with the bank balance. An income and expenditure account shows only this year’s income and expenses, paid or not, leaves out capital items such as equipment bought, and ends with the excess of income over expenditure (a surplus) or of expenditure over income (a deficit).

    How do I work out the subscriptions for the income and expenditure account?

    Start from the subscriptions received. Take off the arrears at the start that were received (less any written off) and the advances at the end; add the advances at the start and the arrears at the end. In the subscriptions account arrears are a debit balance, advances a credit balance, and the income and expenditure figure is the balancing amount on the debit side.

    How are subscriptions written off shown?

    Arrears that will never be paid are credited to the subscriptions account and charged as an expense, subscriptions written off, in the income and expenditure account. The subscriptions income does not change. Some teachers take the amount off the subscriptions income instead; the surplus comes out the same, and both ways are marked right here.

    Why does only the profit on the bar go into the income and expenditure account?

    The bar has its own trading account: bar sales, less the cost of sales (opening stock, plus purchases, less closing stock), less bar wages. Only the profit (income) or the loss (expenditure) goes to the income and expenditure account. Purchases come from the bar creditors account: paid, less owed at the start, plus owed at the end.

    What is the accumulated fund?

    A club’s capital: what it owns less what it owes. At the start of the year it comes from a statement of affairs, all the assets less all the liabilities. At the end it is the opening fund plus the excess of income over expenditure, or less the excess of expenditure over income.

    How do the WAEC and Cambridge layouts differ?

    WAEC puts expenditure on the debit side and income on the credit side, ends with the excess of income over expenditure, and shows the accumulated fund under financed by. Cambridge IGCSE and O Level list income, then expenditure, end with the surplus or deficit for the year, show a café’s results in a café income statement, and show the fund in the statement of financial position as an opening balance, plus surplus or less deficit, and a closing balance.

    Sources, checked October 28, 2026: WASSCE Financial Accounting syllabus (PDF, RACHEL copy of the WAEC text), section 9; WAEC Chief Examiners’ reports, question 6: 2016 (statement of affairs, subscriptions, income and expenditure), 2016 private candidates, 2022 (competition trading account), 2022 WASSCE private candidates, second series (subscriptions, rent and salaries accounts, statement of accumulated fund) and 2020 private candidates (bar trading account); Cambridge IGCSE Accounting 0452 syllabus for 2027 to 2029 (PDF), section 5.5, and its 2027 specimen paper 2 mark scheme (PDF), question 4.