ACCOUNTING FOR GOVERNMENTAL AND NONPROFIT ENTITIES Stark State College Bookstore

by Felix Dunogent

Every chapter opens with a grid that identifies each learning objective
for the chapter, the related pages, eLecture
and Guided Example videos, and end-of-chapter assignments. This allows students and faculty to quickly grasp the chapter contents and to
efficiently navigate to the desired
topic. Connect®
Course management, reporting, and student learning tools backed by great support. Governments treat our money in a distinctive way—they’re not trying to make a profit. Ideally, a government wants expenditures to be very close to revenue in any given year. Differences between revenues and expenditures are called surpluses (a positive difference) or deficits (a negative difference).

Dr. Waymire has served in leadership roles in academic
organizations, participates in standard-setting
activities, and routinely
speaks at academic
and professional conferences. At MTSU and at Northern
Illinois University where she began her academic career, Dr.
Waymire has earned awards for excellence in teaching and research. Every year, government organizations must put together a CAFR (Comprehensive Annual Financial Report).

Text Includes New Accounting Standards

Fund accounting is typically not a topic enjoyed by people who are used to the concepts of for-profit accounting. If you are at all familiar with the analysis of for-profit financial statements, analyzing the financial statements of a nonbusiness organization shouldn’t be too much of a stretch, once you understand what each statement is supposed to be. Nonprofit organizations report using accrual basis accounting and Financial Accounting Standards Board and GAAP standards. Nonprofits straddle the fence somewhere between the private sector and government. Because they are not out to make a profit, fund accounting provides the best accounting system for most nonprofit organizations. The same fundamental ideas apply for nonprofit accounting as governmental accounting—the goal is to have annual expenditures end up very close to annual revenues.

• In Chapter 12 (federal
  government), we cite specific references
  to the government’s Standard
  General Ledger.
• In fact, Rutherford, Buller and Stebbins (2009) point out scholars have yet to investigate the legitimacy of new ventures.
• Financial statements, governmental or nonprofit, can typically be found on the organization’s website or by calling and requesting a copy.
• The goal of this paper is to contribute to understanding of relationship marketing applied in the nonprofit organizations.
• Although most of this text (Chapters 2 through 10) is devoted to state and local
  government accounting, we provide extensive coverage
  of the unique aspects of accounting and financial reporting
  for the federal
  government and nonprofit
  entities.
• We cover the
  latest accounting
  standards issued by the standards-setting bodies.

In fact, Rutherford, Buller and Stebbins (2009) point out scholars have yet to investigate the legitimacy of new ventures. Most of the known research that has been compiled by a few entrepreneurship researchers (see Aldrich & governmental accounting Fiol, 1994; Shepherd & Zacharakis, 2003; Suchman, 1995; Williamson, 2000). Al., (2009), entrepreneurs may be tempted to misrepresent the respective newness and smallness of their firms by lying to their respective customers.

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Dr. Waymire serves on the editorial
boards of Journal of Governmental and Nonprofit Accounting, Issues in Accounting Education, and Journal of Accounting Education. Dr. Patton has served as a board member on numerous nonprofit boards of directors. He is also a board member and chair of United Regional Healthcare System and the Wichita Falls Alliance for Arts and Culture. We’re here to help – Get real-world support and resources every step of the way. Make data-driven decisions to drive reader engagement, subscriptions, and campaigns. This indicates that information on file with an issuing credit card company does not match what is entered.

We attempt to cover the basic accounting
and financial reporting principles in as comprehensive a manner as possible. To keep the text practical
and “real world,” we enhanced the discussion of the principles with numerous
illustrations drawn from financial
reports prepared by actual governments and nonprofit organizations. We cover the
latest accounting
standards issued by the standards-setting bodies. Finally, we designed
the end-of-chapter questions,
exercises, problems,
and cases specifically to help students better understand the material covered in our text. This text has a comprehensive governmental accounting problem in Appendix A for instructors who like to reinforce
the discussion of accounting principles
with a problem that considers
concepts learned in multiple chapters.

New to This Edition

Government and nonprofit organizations aren’t interested in making money, so they use an accounting system called fund accounting. Fund accounting essentially groups financial data together into funds or accounts that share a similar purpose. This way, the organization has a better idea of what resources it has available to complete a specific task.

Don’t forget, though, that a surplus is not a profit, nor is a deficit a loss—governments aren’t in the business of hoarding money (nor are they “in business” at all, as it were). Unlike a for-profit company, if a government finds itself operating at a large surplus (profit), it will usually take steps to lower the tax burden for its residents. Below are the 3 major differences between nonprofit and government accounting processes. Increased scrutiny of corporate actions in today’s business climate puts pressure on all facets of business to adhere to ethical practices founded on principles that are honest, fair and transparent to the stakeholders (Turner, 2010). The importance of business ethics becomes essential in the entrepreneurial setting. Consumer word of mouth and viral internet communications are just a few ways that a negative ethical image could ruin a small business.

Learning Solutions

In particular,
a discussion of GASB proposed changes to the governmental fund reporting model
is found beginning on page 5-33. More than 15 million users have used our Bookshelf
platform over the past year to improve their learning experience and
outcomes. With anytime, anywhere access and built-in tools like
highlighters, flashcards, and study groups, it’s easy to see why so
many students are going digital with Bookshelf. The FASB is intended for “investors and others who use financial reports,” essentially any public, private, or nonprofit organization or business. Unlike the GASB, the FASB defines only one method of reporting for nonprofit accounting.

Exploring the
citations included in this chapter will give students greater insight into
federal government finances;
our Federal Financial
Reporting in Practice provides an accounting perspective on the growth of the federal deficit. They too use fund accounting and offer up financial statements for public consumption each year. To enliven the text, we include a special feature that we call Governmental (or Nonprofit) Accounting in Practice, Federal Financial Reporting in Practice,
and Auditing in Practice. Nevertheless, understanding what fund accounting is, and how it works, is the only way to confidently look at the financial publications that governmental and nonprofit organizations publish each year.

The CAFR can include overall financial data as well as information on specific funds and reports the results of the period in question, often the financial year. The CAFR also includes consolidated financial statements and includes accumulations from previous years. While many investors have at least some understanding of typical financial statements like the balance sheet, income statement and cash flow statement, governmental and nonprofit financial statements may be significantly less familiar. These
problems provide students
with the opportunity to discover the issues with audit quality
in the government and nonprofit sectors, as well as
the timing lag from fiscal
year-end to filing of the audit
report.

The goal of this paper is to contribute to understanding of relationship marketing applied in the nonprofit organizations. Being crucial for the survival and development of the non-profit organizations, the relationships with donors are emphasized among numerous relations with different stakeholders. Specific aim of this paper was to consider if the CRM concept used by marketing oriented profit organizations can be applied in non-profit ones. As it will be elaborated, a slightly modified CRM concept is highly appropriate for managing relationships with donors for various reasons.

Instructor Details

Therefore, using the approach for analyzing each phase of this process in non-profit organizations, some main recommendations are summarized. Tammy R. Waymire, PhD, CPA, is the MTSU Accounting Advisory Board Outstanding Professor of Accounting at the Jennings A. Jones College of Business at Middle Tennessee State University in Murfreesboro, TN. She teaches undergraduate and graduate governmental and nonprofit accounting courses and intermediate accounting. She received her bachelor’s degree from Arkansas Tech University, her MBA from Harding University, and her PhD from the University of Arkansas. With the amount of money we pay in taxes each year, it is madness to not look at a governmental financial statement just as you would for any other substantial investment. Donating money blindly without making sure that it’s getting to those who need it is the same thing.

• Therefore, using the approach for analyzing each phase of this process in non-profit organizations, some main recommendations are summarized.
• Because
  of this, some students have difficulty grasping both the concepts underlying the modified accrual
  basis/current financial resources measurement focus
  used in governmental-type funds and the accounting and financial reporting
  implications.
• She received a Bachelor of Arts degree in English Literature with a Concentration in Accounting from the University of Cincinnati.
• The FASB is intended for “investors and others who use financial reports,” essentially any public, private, or nonprofit organization or business.
• Governmental accounting is generally taught after students
  have learned the theory of accrual accounting and the journal entries
  needed to record
  accrual-related transactions and events.
• Most of the known research that has been compiled by a few entrepreneurship researchers (see Aldrich & Fiol, 1994; Shepherd & Zacharakis, 2003; Suchman, 1995; Williamson, 2000).
• Government and nonprofit organizations aren’t interested in making money, so they use an accounting system called fund accounting.

Governmental and nonprofit accounting can be difficult
for students who have been exposed only to commercial accounting. To help students comprehend the governmental and nonprofit accounting concepts, a guided
example is included with each learning objective. The guided examples allow students to do an exercise that reinforces the accounting concept or application discussed
in that section. In addition, the authors explain the thought process used to solve the guided examples
in a
video available on Cambridge Business
Publishers’ online homework
platform, myBusinessCourse.

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