Glossary · Also called Club or society
Non-trading organisation
A club or society that exists to serve members, not to make a profit.
What it means
An organisation such as a club or society whose main aim is to provide benefits to members rather than to earn profit.
Example
A sports club funded by members' subscriptions is a non-trading organisation.
Why it matters
These prepare a receipts and payments account and an income and expenditure account instead of trading statements.
In practice
A non-trading organisation replaces the trading and profit and loss account with a receipts and payments account and an income and expenditure account. Its statement of financial position is built around an accumulated fund instead of owner's capital. The surplus or deficit from the income and expenditure account is added to, or taken from, that fund.
Suppose a badminton club receives RM4,000 in subscriptions, pays RM1,200 for court hire and RM900 for coaching. The RM1,900 surplus increases the accumulated fund. Any bar or shop the club runs still needs its own small trading account, because that part trades for profit.
The key difference from a sole trader is purpose. A trader aims to earn profit for one owner. A club aims to provide facilities for members. So it uses the words surplus and accumulated fund, not net profit, capital or drawings.
If club accounts feel unfamiliar, one of our teachers can show you the layouts side by side with the ones you know. Book a trial class.
Related terms
Syllabus reference: Cambridge 0452 and 0985, syllabus for 2027 to 2029, sub-topic 5.5 Clubs and societies (page 17).
Definitions here are general accounting explanations for study. For your board's exact wording, see its official syllabus via Sources.
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