TEXT--Finance Flashcards
A ______ is a formal document requesting approval for a purchase.
Requisition
After an employee asks for approval to buy something (requisition), what are 4 possible ways to pay for it?
(1) PO
(2) Purchasing card (P-card)
(3) Credit card
(4) Petty cash
**This type of PO consolidates small, continuous purchases.
Blanket PO
**For items bought regularly, this is a more efficient method to purchase them.
Blanket PO
This type of PO is issued for a 1-time delivery of a specific good/service; when the good/service delivered is paid in full, the order is complete.
Standard PO
**This payment method works like a personal credit card, has a spending limit, and is issued by the agency for agency purchases. It can be designated for a specific account.
P-card
**For this method of payment, the accounting department pays the issuing company (i.e., Visa) rather than each individual business, saving the agency time.
P-card
What is the main difference between P-cards and credit cards?
Billing
P-cards must be paid in full at the end of each ______.
Month
Do credit cards or P-cards typically have higher monthly fees?
Credit cards
In this payment method, you generally complete a form to obtain money that is tightly controlled by the accounting department.
Petty cash
**THIS financial report includes revenues, expenses, and net income for a SPECIFIC TIME PERIOD.
Income statement
THIS financial report shows allocated and expended monies.
Budget statement
THIS financial report can be analyzed to see how much money is left for the FY.
Budget statement
Balance sheets can also be called…
Statements of financial position
**THIS financial report represents the accounting equation: Assets = Liabilities + Equity
Balance sheet
**THIS financial report shows what the agency actually owns and what it owes to others.
Balance sheet
In accounting, ________ are the economic resources the agency has, including cash, inventory, and land.
Assets
In accounting, ________ are what the agency owes such as equipment/supplies purchased that month.
Liabilities
In accounting, ________ is the portion of the organization that is owned free and clear of any debt.
Equity
THIS financial report is often part of program evaluation and outlines allocated and expended revenues and expenditures, along with info that may have impacted the program.
Project report OR program report
THIS financial technique shows the amount of revenue necessary for various participation levels and the extent of subsidization required.
Break-even analysis
THIS financial technique begins by examining program expenses (fixed/variable) and income, and then projects them based on the number of participants to see how many participants would result in a loss, breakeven, or profit.
Break-even analysis
_______ FIXED costs are the result of conducting a specific program.
Direct
_______ FIXED costs may include agency administrative expenses, utilities, maintenance, debt payment, etc.
Indirect
INDIRECT FIXED costs are also known as…
Overhead costs
FIXED costs stay the same, regardless of…
Participant enrollment
What are 2 popular approaches for assigning FIXED COSTS to programs?
(1) Equal share allocation (each program pays equal share)
2) Percent of budget (program pays percent of overall budget equal to percentage the program area has
THESE costs change by volume, but not by individual participants.
Changing fixed costs
1 instructor can teach 12 patrons, but more than 12 requires 2 instructors, thus the instructor is a ______________.
Changing fixed cost
THESE expenses fluctuate in proportion to the number of participants.
Variable costs
What are 3 types of fixed costs?
(1) Indirect (overhead)
(2) Direct (program-specific)
(3) Changing (program-specific; impacted by volume)
What are the 3 stages of the typical budget process?
(1) Prep
(2) Adoption/authorization
(3) Execution/implementation
T/F The budget process is cyclical; new budgets are being prepared as present ones are being executed.
True
How far in advance of the FY does budget planning typically begin?
1 year
Budget prep begins when staff are provided a ________ for budget review/submission
Timeline
Currently accepted professional practice suggests that budgets should be prepared in a ______ fashion, starting with frontline program ops budgets; these are then summed and added up, through the agency org chart, often by department.
Cumulative
Budget prep forms/format vary greatly in public, commercial, and nonprofit agencies; however, all budgets should contain what 2 things?
(1) Anticipated revenues/expenditures for FY
(2) Agency goals/objectives
What are the 5 general sources of revenue? (Cash Gets Everybody I Can)
(1) Compulsory income
(2) Gratuitous income
(3) Earned income
(4) Investment income
(5) Contractual receipts
Keeping continuos revenue records and analyzing differences between anticipated and actual revenues are essential to assess what 3 factors in budget variation?
(She’s Only Pretty)
(1) Seasonal
(2) Operation changes
(3) Public interests/needs
Typically, an agency’s largest expense is _________.
Personnel
THIS budgeting system was among the 1st and is still widely used by park/rec agencies?
The line item-based object classification budgeting system
**In the following example of expenditures classified by object,
1000 is the __________,
1100 is the __________,
and 01-04 are the __________.
*1000: Services: Personnel* 1100 Salaries, Regular (Full Time) --01 Admin --02 Recreation --03 Golf --04 Operations
(1) Budget classification
(2) Budget object
(3) Line items
A __________ is any agency unit administered by staff who are responsible for the activities of that unit, including its budget. Financial transactions from this unit are organized separately to compare generated revenue to expenses.
Cost control center
In preparing an annual operating budget, the _________ from all _________ are added together to provide an estimate of the agency’s total revenues/expenditures for the coming FY.
(1) Object classification expenditures
(2) Cost control centers
A significant portion of the revenue used to support public parks/rec is generated from THIS revenue source (including real property, personal property, sales, excise, and income taxes).
Compulsory income
A majority of tax revenue for parks/rec agencies comes from THESE taxes assed on land and anything built or growing on it.
Real property taxes
When calculating taxes, the total assessed value of all properties within the political jurisdiction is called the __________; this is then multiplied by the ______ in the community. (16)
(1) Tax base
(2) Tax rate
THESE taxes are allowed in 41 states, taxing household and business tangible property such as cars and furniture, as well as stocks and bonds.
Personal property taxes
THIS tax, used in most states at varying levels, is assessed on the sale of many tangible goods.
Sales tax
**THESE taxes are imposed on specific goods/services, such as hotel taxes and “sin” taxes. It is not unusual for revenue from these to be used for specific purposes such as to fund a convention or build a sports stadium.
Excise taxes
THESE taxes are assessed on income earned in some states.
Income taxes
____________ is revenue received without expectation of return including grants, bequests, and sponsorships. (17)
Gratuitous income
What are 3 sources of grants? (17)
(1) FEDERAL government
(2) STATE government
(3) Private foundations
What precaution should be recognized when using grant funding? (17)
Grant programs exist for a limited time period
Because grant programs exist for a limited time period, many agencies use federal/state grants for ____, leaving the agency with operation and maintenance costs only. (17)
Capital projects
THIS is a popular type of grant for parks/rec agencies, where the granting agency matches agency money. (17)
Matching fund grant
THESE are funds received from individuals through wills, life insurance, and land or property donations (before or after death). (17)
Bequests
THIS form of gratuitous income is generally obtained in the form of cash or in-kind services, where companies donate supplies, equipment, staff time, and/or skills. (17)
Sponsorships
Name 2 benefits of being a sponsor. (17)
(1) Marking through media ad recognition and logos at events
(2) Access to participants
THIS is generated through fees and charges including admission and rental fees, surcharges, and license and permit fees. (17)
Earned income
THESE is a major source of income for park/rec agencies, obtained by contracting with private agencies or individuals who sell merchandise or provide services. (17)
Contractual receipts
THESE are generally granted when the rec agency cannot provide a service as effectively or efficiently as the commercial organization. (17)
Contracts
What are 3 areas of service in which rec agencies commonly form contracts with outside parties? (17) (BC Eats Ice/cream)
(1) Boat rentals
(2) Concessions
(3) Equipment shops
(4) Instructional services
Customarily, businesses providing contracted services pay _____ to the rec agency; they may also pay _____ for the contract privilege. (17)
(1) A percent of their gross revenue
(2) An annual fee
T/F Contractual agreements operating on a percentage basis require financial tracking systems to record all sales transactions. Receipts/tickets sold should be subjected to an audit and inspection at any time.
True
Contracts may be short term or long term and should require _____ or _______ to guarantee faithful performance as well as a ______ naming the rec agency as one of the insured. The contract should give the rec agency control and approval of concession commodities, business hrs, signage, and other advertising.
(1) Cash
(2) Security bond
(3) Liability policy
THIS income is derived from interest gained from investing unneeded agency funds into money markets, stocks, mutual funds, etc.
Investment income
To improve internal processing of cash collection and deposit, each department that receives cash payments should have what 2 things?
(1) Revenue collection policies/procedures
(2) Special deposit procedures to handle revenue processing and security
What 8 things should be done to discourage dishonesty and avoid participant criticism at each site receiving cash payments?
(1) POST FEE SCHEDULES
(2) POST 2+ EMPLOYEES AT ADMISSION (1 accepts fees/gives receipts; 1 accepts receipt at entrance) or…
(3) USE CASH REGISTER when volume doesn’t justify 2 staff
(3) RECONCILE CASH
(4) ROTATE ATTENDANTS responsible for receiving cash through facilities/schedules
(5) USE CARBON COPY RECEIPTS if no POS system (1 copy each: customer, main office, and facility)
(6) DEPOSIT CASH DAILY OR KEEP IN SAFE
(7) LIMIT ACCESS TO REGISTERS/SAFES Keys should be disbursed to supervisors only
(8) SCHEDULE UNANNOUNCED INTERNAL AUDITS often to review inventory, cash count, and cash-handling procedures
**THIS is est. by agencies to cover payments of small, quick purchases not to exceed a specified amount.
Petty cash
Petty cash fund custodians are responsible for securing cash in what 7 ways?
(1) Deny access to the cash
(2) Keep cash physically separate
(3) Keep cash secure
(4) Do not use cash as a charge fund
(5) Avoid multiple purchases to circumvent spending limits
(6) Reimburse only expended funds
(7) Always secure receipts
How often should vouchers to reimburse petty cash be processed?
As often as warranted by expenditures
What are 4 types of operational/financial data collected regularly to assist the department in accounting for cash, revenues, and expenditures?
(1) Program/facility/event attendance
(2) Daily or hourly facility room counts
(3) Cash reports
(4) Maintenance reports
**Tax rates are sometimes expressed in terms of mills. How many mills is $1? (16)
1,000
**Tax rates can be expressed in terms of mills. In this case, $1 equals _____ mills and is ______ of the assessed property value. (16)
1,000; 1/1,000
**Room counts should be conducted how often in a busy facility?
Hourly
