Question

how life membership fees is treated in the books of non_trading institution?​

Answer 1

Answer:

Amount received as Life Membership Fee is treated as capital receipt because organizations will have to provide services to these members for lifetime. Amount of Life Membership Fee will be recorded as a liability in the Balance Sheet. ... The balance will be shown as a liability in the Balance Sheet.

Answer 2

The life membership fees is treated in the books of non_trading institution.

• In the beginning, the sum paid as a life membership fee may be considered a capital receipt. Second, if the life membership price is a little amount, it can be considered income. Life Membership Fees are added to the Capital Fund on the liabilities side of the balance sheet as a capital receipt. Due to the life member's one-time purchase and lifetime access to services, we do not record it as revenue.
• Non-trading organisations are those whose primary goals are to benefit their members and society as a whole rather than to make a profit. These organisations work to advance societal welfare.
• Trade investments are those that are made in order to maintain a business. Security deposits, for instance, are paid to a corporation in order to purchase the dealership, agency, etc.
• Non-Trade Investments are those investments which are made to earn revenue. For instance, buying shares, debentures, or other securities. Membership fees are a revenue item and should be displayed as revenue.

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