Nonprofit Accounting Basics

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Inventory

Inventory represents the value of assets held by an organization for resale.

Accounts Payable

Accounts Payable is a liability account found on the Balance Sheet or Statement of Financial Position that represents money owed to another party.

Security Act 2.0: What you need to know

On December 29, 2022, President Biden signed the Consolidated Appropriations Act, 2023, which includes the provisions of the Securing a Strong Retirement Act, commonly called SECURE 2.0.

Sending Invoices

Invoices may need to be prepared for a number of reasons. Some organizations sell books or newsletters for a fee. Others require registration for meetings or bill for dues.

Internal Controls

What are internal controls?

Internal controls are the financial processes and procedures that enable the organization to safeguard its assets.

General Ledger

The general ledger documents all of the organization’s transactions over the course of a year for all accounts.

Recording Other Transactions

The general ledger is the journal where all transactions are posted throughout the year and balances are maintained.

Sample Journal Entries for Government Grants

The following are the entries necessary for cost-reimbursable government grant (assuming the grant is determined to be an exchange transaction):

Exchange Transactions

Factors that may indicate an exchange transaction:

Often it is difficult to distinguish between a contribution and an exchange transaction, the following factors are indicative of an exchan

Split-Interest Agreements

What are "split-interest" ("planned giving") agreements?

Split-interest agreements, also known as planned giving, are contributions that assign the legal rights to certain assets to an NFP