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Corps Financial Management > Final Exam > Flashcards

Final Exam Flashcards

1
Q

Stewardship (definition)

A

(oikonomos) entrusted to take care of someone else’s possessions (both possessions and contributions). Allows the church to perform its ministries.

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2
Q

Why is stewardship important?

A

Glorifies God
Meets human needs
To discipline ourselves
To support the life, ministry and mission of the church

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3
Q

Biblical view of stewardship

A

A way of growing in Christ and is an important part of ongoing church life.

  • OT “one who is over a house”. Everything belongs to the Lord (Creation). Tithing was to honor God and others, not necessarily in the form of money.
  • NT- Concerned with more than just resources to a manager. Be faithful/accountable, increasing the assets. We are partners with free will, and will be accountable.
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4
Q

Aspects of Internal Control (4)

A
  • Funds, money that is ready for a specific use within the church.
  • Journals- record keeping
  • Receipts- copies
  • Loose offering slips
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5
Q

Financial Reporting - Statement of Financial Position (Balance Sheet)

A 
o	Assets (owns)- something of value
o	Liabilities (owes)- present obligations
o	Net Assets- the difference between assets and liabilities
o	Assets=Liabilities + Fund Balance
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6
Q

Financial Reporting - Statement of activities (Income statement)

A

shows how much income was received and what expenses were during a given period.

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7
Q

Financial Reporting - Statement of Cash Flows

A

outlines the change in cash during the reporting period… classifies cash receipts/disbursements.

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8
Q

Financial Reporting - Budgeted financial statement

A

compares actual income/expense to budgets.

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9
Q

The budget often reflects …

A

…what the ministry values and our non-negotiables.
o Consider the mission statement
o Ministry priorities versus budgeting

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10
Q

Fiduciary responsibility (definition)

A

a special position of trust to act in the church’s best interest (integrity), accurate

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11
Q

Cash flow

A

income/expense

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12
Q

Internal Audits (what they look at)

A

examine incomes, expenses, record keeping, and reporting.

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13
Q

Steps of Internal Audits (6)

A

o Look for following the separation of duties
o Everything is accounted for, recorded, deposited, and safeguarded.
o Every check accounted for and corresponds to records, approval processes for checks followed, payroll checks match time sheet records.
o Bank statements reconciled correctly, check all legal documents (employment contracts, W-2, 1099). Making sure tax items are properly filed. Salaries agree with contracts.
o Review budget process, documents safeguarded.
o Present a report with findings and recommendations for changes.

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14
Q

Spending controls (3)

A
  • Person who approves purchases do not prepare checks
  • Person who prepares checks cannot sign them
  • Person authorized to sign checks cannot be the person who approves purchases.
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15
Q

Why do we need a Stewardship Plan?

A

Develops a giving church and serves to diminish the effects of financial downsizing.

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16
Q

Why do we need a stewardship campaign?

A

to educate, motivate people in the local church to spiritual faithfulness through biblical stewardship. (time, talent, possessions, money).

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17
Q

7 Benefits of Stewardship planning

A
  1. Help Strengthen Christians
  2. Help All Christians to become Obedient
  3. Build Relationships with the Marginal Attenders
  4. Share our Blessings
  5. Reveal Our Hearts
  6. To Give to God
  7. To Teach Judgment
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18
Q

Bank Reconciliation (definition)

A

Shows amount in the bank from bank statement, checks that have not cleared subtracted from the balance.

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19
Q

What is accrual basis?

A

income and expense are recorded when earned/incurred.

- Difference b/n this and cash basis is timing.

20
Q

Budget (definition)

A

plan for allocating the resources of the congregation. A roadmap of where we have been and where we are going in accomplishing this plan.

21
Q

10 Reasons for budgeting

A
  1. Formalizes Planning
  2. Reduces emotion in how to use funds
  3. Basis for performance evaluation
  4. Basis for control
  5. Assists in communicating/coordinating groups
  6. Gets members involved
  7. Increases commitment to giving
  8. Generates confidence in leadership
  9. Allows for continued operation
  10. Allows time to lend or borrow prudently.
22
Q

Financial transparency (definition)

A

open with financial dealings. A way to disarm the power of money by avoiding secrecy.

23
Q

Internal Controls (definition)

A

checks and balance system to prevent stealing.
systems, activities, and procedures in place that ensure safeguarding as well as the efficient management and use of church resources.

24
Q

6 principles of internal controls

A
  1. Establishment of Responsibility- can’t access everything
  2. Segregation of Duties - (open mail, enter checks, authorizing payment) Person isn’t able to all steps by themselves.
  3. Documentation procedures - numbered checks, receipts, documents and forwarded promptly.
  4. Physical, mechanical, and electronic controls
  5. Independent internal verification - internal audits
  6. Human Resource controls- changing positions, routines, background checks.
25
Q

Fraud Triangle (OPR)

A
  1. Opportunity
  2. Pressure
  3. Rationalization
26
Q

Salvation Army Financial rules

A
  • No one should count or transport money alone.
  • Counting/Depositing should be taken care of ASAP and reported. Do this in a secure location.
  • Envelope system contributes to sound accounting procedure.
  • Those who approve purchases, prepares checks, and signs them are all different people.
  • Internal audits, segregation of responsibilities
27
Q

GL

A

General Ledger
All financial modules integrate with this- it’s the stored data provides history and reports to handle planning and budgeting activities.

28
Q

AR

A

Accounts Receivable

29
Q

AP

A

Accounts Payable

30
Q

CN

A

Contribution- records giving history (trends and reports)

31
Q

BR

A

Bank Reconciliation

32
Q

FYE

A

Fiscal Year Ending

33
Q

YTD

A

Year To Date

34
Q

2 Most Important Financial Statements BS/IER(BFS)

A

Balance Sheet

Income and Expense Report (Budgeted Financial Statement)

35
Q

Qualification for church leaders

A

Respectful, sincere, children not wild (can manage household), blameless, honest, not drunk, patient, not quick tempered, not pursuing personal gain, monogamous. INTEGRITY
1 Timothy/Titus

36
Q

Fiscal year

A

Oct. 1-Sept. 30

37
Q

Week Period

A

ends on Sunday of the final week of the month.

38
Q

Net worth

A

how much you are worth in this moment (assets- liabilities)

39
Q

Accounting equation(LFA)

A

Assets=liabilities + fund balance

40
Q

4 Functions of Money Management (RRBS)

A
  1. Receiving
  2. Recording
  3. Budgeting
  4. Spending
41
Q

5 Forms - Balance Sheet

A

includes sections of Assets, Liabilities and Net Assets.
- A snap shot of where the organization stands on specific date.
- Cash balance found here.
Assets- any item of economic value owned by the organization
Liabilities- legal debt or obligations of an organization
Net Assets- Assets minus liabilities
 Other terms for Net assets include fund balance, net worth

42
Q

5 Forms - Income/Expense Statements

A

records revenue and expenses over a specified period of time. (Budgeted Financial Statement)

- it explains why net assets are increasing or decreasing, how well you are managing, are you operating at a profit or loss. 
- current year surplus/(deficit)=bottom line
43
Q

5 Forms - Bank Reconciliation

A

Monthly

44
Q

5 Forms - AR Detail Aging

A

Accounts Receivable- Who owes you money

45
Q

5 Forms - Accounts Payable

A

Who you own money to

Corps Financial Management (1 decks)

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