Final Exam Flashcards
Be familiar with the term Christian Stewardship and the importance of preaching about stewardship.
Christian Stewardship- concerns our responsibility to live wholly for God, managing our resources to give him glory and benefit humanity
Preaching stewardship- Preach confidently, Preach carefully, Preach creatively, Preach centrally, Preach consistently
How does Stewardship benefit the church?
It takes care of the church and helps to also benefit everyone in the process
Define Stewardship
The use and care of our natural resources; includes what we do with abilities and talents; it involves the way we manage our time.
The biblical view of stewardship is a way of growing in Christ and is an important part of ongoing church life
True
Understanding the phrase “Internal Control” also in Jamieson and Jamieson
is accounting jargon for a checks-and-balances system to prevent stealing.
Parts of a Balance Sheet (Statement of Financial Position)
Statement of Financial Position is referred to as the balance sheet. This statement provides a snapshot of the church’s financial picture on any given date
Financial Reporting Basic Concepts
Assets- current assets are cash and any other assets or resources that can be converted into cash in a short time
Liabilities- obligations the church has to others
Net assets- shows the difference between an organization’s assets and its debts or liabilities
Statement of activities- shows how much income was received and what the expenses were for a given period
Statement of cash flows- outlines the change in cash during the reporting period
Budget financial statement- an expanded income statement that is used to compare actual income and expenses to their budgets
Ministry priorities versus budgeting
We have to understand the actual values of a congregation before we can effectively influence the budget process. Often the budget is the best indication of what the leadership values.
Fiduciary responsibility
When church members become part of the church’s governing board, they become representatives of the corporation and must act in the church’s best interests:
Good Faith- perform their responsibilities in good faith and manner they believe to be in the best interests of the corporation
Loyalty- generally requires that any transaction between the board and its directors be (a) fully disclosed, (b) approved by the board without the vote of the interested director, and (c) fair and reasonable to the corporation
Cash Flow Terms
Plot income- show when we receive money and how much we took in
Plot expenses- simply add up the expenses for each month and connect another set of points on the graph
Look for variations- look for high-and low-income months, seasonal periods of greater spending, points at which income is low and spending is high, and vice versa
Project next year’s graph- using data from the three-year historical graph, we can hazard estimates of the coming year’s income and expenses
Internal Audits
Churches may need to have their financial records audit because of stewardship, reputation, protection of assets, and record updating.
The audit committee examines four main areas: income, expenses, record keeping, and reporting.
Watching income- an audit establishes that all monies received are properly handled
Examining expenses- there are four areas that concern the auditors
Checking record keeping- the auditors next follow a number of procedures to satisfy themselves that the records are properly maintained
Watching reporting- this part of the audit checks the accuracy of the treasurer’s reports and budgets and looks for ways to improve them
Presenting the report
Spending controls
Three key elements for controlling the disbursement of church funds:
(1) The person who approves purchases should not prepare checks for payment
(2) The individual who prepares the checks should not be authorized to sign them
(3) The person authorized to sign checks should not be the person who approves purchases or payments
Monthly Reports
Cash activity summary
Fund activity report
Trail balance report
Bank Reconciliation
comes directly from the bank statement
Balance Sheet
reports we get from Shelby or serenic provides a summary of expenses and incomes