Accounting Terms to Know Flashcards
Change in Net Assets =
Revenues - Expenses
Total Expenses =
Program Expenses + Fundraising Expenses + Administrative Expenses
Change in Cash =
Cash from Operations + Cash from Investing + Cash from Financing
Cash and Cash Equivalents
These are the funds in the bank or in highly liquid and secure securities, such as US treasury bills.
Prepaid Expenses
Costs, such as insurance, that are paid in advance of receiving benefits. This asset declines in value (and is recorded as an expense) as the benefit associated with this cost is consumed.
Liabilities
outstanding debts
Assets
Things of value that the non-profit owns
Net Assets
Portion of the assets funded by the nonprofit’s own resources
Change In Net Assets =
Revenues - Expenses
Accrual method requires that…
revenues be recorded when earned and expenses when incurred.
The assets always balance the liabilities and net assets because…
each asset must be funded by resources provided by others or by the organization itself.
Assets are listed in order of their…
Liquidity
Cash and Cash Equivalents (in terms of liquidity)
are the most liquid funds possessed by a non-profit
Fixed Assets may also be called…
Property, Plant, and Equipment
Pledges or Grants Receivable are an…
Asset
Account Payable are…
A liability representing amounts owed to vendors or creditors for goods or services rendered. Unpaid bills (Salaries Payable)
Grants Payable are….
a liability that the organization promises to individuals or other organizations.
Net Assets are Divided into three categories.
- ) Unrestricted
- ) Temporarily Restricted
- ) Permanently Restricted
The Statement of Activities Provides
information on the operating activities of a nonprofit between one date and another. The statement provides information on the mix of revenues and expenses.
Most Common Revenues for Non Profits are…
- ) Contributions
2. )
If the asset is received in advance of the condition being fulfilled, then the asset is recorded as a …
liability (refundable advance) rather than a revenue. When the conditions are met, then this liability is eliminated, and revenues are recorded.
When in kind contributions are recognized they are recorded as…
equal and offsetting revenues and expenses.
Special Events Revenues
Revenues raised by special fundraising events are recorded separately from contributions.
In the statement of activities what are the three functional categories of expenses?
- ) Program Expenses
- ) Fundraising Expenses
- ) Administrative Expenses
Cash From Financing Activities
This section depicts the cash inflows and outflows associated with receipts and repayment of funds provided by creditors and by donors whose permanently restricted contributions are recognized in the statement of activity.
(The issuance of long term debt would fall under this)
