Chapter 17 - Introduction to fund accounting. The goal is for you to learn: Distinguish between a nonbusiness organization and a profit-oriented enterprise; explain the role of fund accounting; distinguish among the concepts of revenues, expenses, and expenditures as used in profit-oriented entities and as used for expendable fund entities;. | Introduction to Fund Accounting 1 Learning Objectives Distinguish between a nonbusiness organization and a profit-oriented enterprise. Explain the role of fund accounting. Distinguish among the concepts of revenues, expenses, and expenditures as used in profit-oriented entities and as used for expendable fund entities. Understand the classification of revenues and other resource inflows for fund accounting. Understand the classification of expenditures and other resource outflows for fund accounting. 2 Learning Objectives Describe the critical events in the use of financial resources of an expendable fund. Explain how capital expenditures are recorded in an expendable fund. Understand the role of a general fund. Contrast the consumption and the purchases methods of accounting for inventories (and other prepaid items). 3 Fund Accounting Accounting for nonbusiness organizations. Fund Accounting 4 Nonbusiness Organizations Economic Entities Provide socially desirable service without regard to financial gain. Business Enterprises Earn a return on investment. Operate in a competitive market. Face liquidity concerns. Classification of Nonbusiness Organizations Five Major Classifications Governmental units. Hospitals and other health care providers. Colleges and universities. Voluntary health and welfare organizations. Other nonbusiness organizations (trade associations, professional associations, museums, religious organizations, etc.) 5 Distinctions between Nonbusiness Organizations and Profit-Oriented Enterprises Distinctions Absence of primary goal to earn a profit. No equity interests. Seldom finance through charges to individuals who benefit from the service. Rely on political action or fund-raising campaigns. Income determination model generally not applicable. Restrictions or limitations on use of resources. 6 LO 1 Nonbusiness organizations versus profit-oriented enterprises. LO 1 Nonbusiness organizations versus profit-oriented enterprises. Standards for . | Introduction to Fund Accounting 1 Learning Objectives Distinguish between a nonbusiness organization and a profit-oriented enterprise. Explain the role of fund accounting. Distinguish among the concepts of revenues, expenses, and expenditures as used in profit-oriented entities and as used for expendable fund entities. Understand the classification of revenues and other resource inflows for fund accounting. Understand the classification of expenditures and other resource outflows for fund accounting. 2 Learning Objectives Describe the critical events in the use of financial resources of an expendable fund. Explain how capital expenditures are recorded in an expendable fund. Understand the role of a general fund. Contrast the consumption and the purchases methods of accounting for inventories (and other prepaid items). 3 Fund Accounting Accounting for nonbusiness organizations. Fund Accounting 4 Nonbusiness Organizations Economic Entities Provide socially desirable service without .
