Non-Profit Thingz
This is a 12-month period used for financial reporting and budgeting by businesses, governments, and other organizations.
Fiscal Year
What does the GAO stand for and what does it do?
Government Accountability Office- They audit/evaluate federal programs for efficiency and compliance.
True or False:
FASB sets the standards for state/local governments
GASB sets the standards for private sector & nonprofits
FALSE:
The Financial Accounting Standards Board (FASB) sets the standards for the private sector/nonprofits
The Governmental Accounting Standards Board (GASB) sets standards for state/local governments
True or False: Proper Accounting can help to detect or prevent fraud within an organization.
True
This is the part of a budget where you explain the estimates you made
Assumptions
True or False: Audits can only be completed once a year
FALSE.
While external audits may occur annually, internal audits can take place multiple times a year based on the organization's needs
This type of tax is when those who are lower income pay more of the tax
Regressive Tax
What is the culture vs climate of an organization?
Culture- the shared values, beliefs, and practices that shape employee behavior and influence how the organization interacts with the world.
Climate- the shared perceptions, attitudes, and feelings employees have about their work environment and the company's policies and practices
Would clean air be considered a Real Benefit, Transfer Benefit, Tangible Benefit, Intangible Benefit, or Public Good?
Public Good!
Real Benefit = Direct Economic Gains
Transfer Benefit = Redistribution (ex: subsidies)
Tangible Benefit = Measurable Outcomes (ex: new infrastructure)
Intangible Benefit= Non-Measurable Outcomes (ex: community trust)
This provides a snapshot of an organization's financial position, detailing assets, liabilities, and net assets at a specific time.
Financial Statement / Balance Sheet
This is the process of of recording, classifying, summarizing, analyzing, and reporting financial transactions to provide accurate information for planning, decision-making, and accountability in organizations.
Accounting
This budget is a detailed financial plan that lists revenue and expenses, breaking down costs into specific categories
Line Item Budget
These are independently verified statements for accuracy and GAAP/GASB compliance
Audited Financial Statement
These funds are the money used for a company or organization's day-to-day activities, including expenses like utilities, salaries, and supplies
Operating Funds
What is the main difference between a 501(c)(3) and a 501(c)(4) organization?
501(c)(3) organizations cannot engage in political activity or lobbying
This is essentially an IOU from a company or government to investors, promising to pay back the borrowed amount plus interest.
Bonds
(They include revenue bonds, full faith/credit bonds, or social impact bonds)
This is a comprehensive financial report for a state, municipality, or other governmental entity, designed to comply with the accounting requirements of the Governmental Accounting Standards Board (GASB).
Annual Comprehensive Financial Report (ACFR)
This is the type of accounting that is recorded when cash is received or paid
Cash Accounting
This is a budgeting method where every expense and saving allocation is justified for a new period, instead of relying on previous budgets
Zero Based Budget
What is the difference between internal and external auditing?
Internal auditing is conducted by employees within the organization and focuses on evaluating and improving internal controls, risk management, and governance processes. External auditing, on the other hand, is performed by independent auditors from outside the organization and focuses on verifying the accuracy and fairness of the company’s financial statements.
These funds are financial resources used to invest in assets that generate long-term value for a business or organization
Capital Funds
What is the difference between outputs & outcomes?
Outputs are measurable products (like workshops)
Outcomes are long term impacts (like employment)
What is the difference between a Cost Benefit Analysis and a Cost Effectiveness Analysis?
A Cost-Benefit Analysis compares costs to monetary benefits, whereas a Cost-Effectiveness analysis compares costs to a non-monetary outcome.
This is a document that summarizes a company's financial performance and position over a specific period, like a quarter or a year.
Financial Report
This is the type of accounting that is recorded when a pledge or promise is made
Accrual Accounting
What is a budget calendar?
A schedule for preparing, reviewing, approving, and implementing a budget. Different cities/states have different timelines for this.
This type of audit reviews an organization's internal controls and processes.
Internal Audit
These are funds that are held by a government entity in a trust or agency capacity for other individuals or entities.
Fiduciary Funds
Name the three sides of the Fraud Triangle
Pressure, Opportunity, Rationalization
Explain capital campaign, capital financing, and a capital plan.
Capital Campaign: Fundraising for Specific Projects
Capital Financing: Securing Loans via grants, loans, or bonds
Capital Plan: A long term asset investment strategy
This is a visual representation that outlines how a program or project is intended to work and achieve its goals. It illustrates the connections between resources, activities, outputs, and outcomes
Logic Model
This is when the Accrual and Cash reporting methods are combined. This method is required by the General Accepted Accounting Principles (GAAP) for large organizations.
Modified Cash Accounting
This is a budgeting approach where funding decisions are tied to achieving specific, measurable goals and outcomes
Performance Based Budget
This type of audit evaluates operational efficiency of an organization
Operational Audit
This office oversees Federal Budgets & Grants
Office of Management & Budget
This model helps organizations design, implement, and assess internal controls, ultimately enhancing reliability, governance, and risk management
COSO Framework
What is Encumbrance?
Funds that are reserved for committed expenditures (in order to prevent overspending)
What is the Federal Funding Accountability & Transparency Act?
This is the type of accounting is used when use of donated funds has been limited by the donor, grant authority, governing agency, or other individuals.
Fund Accounting
Who is Aaron Wildasvsky?
A scholar on budgeting theory, emphasizing its political and incremental nature. He wrote a book titled "The Politics of the Budgetary Process
This type of audit assesses an organization's program performance & compliance.
Program Audit
Name 3 sources of revenue for nonprofit organizations
Donations, Grants, Revenue from events & activities
What is this equation:
Fixed Costs / (Price Per Unit - Variable Cost Per Unit)
Break Even Analysis
This is a fund of assets, usually donated, that is invested to generate income, with the principal (the original donation) generally remaining intact
Endowment
This is a United States federal law passed in 2002 that mandates certain practices in financial record keeping and reporting for corporations
Sarbanes Oxley Act
Name the three parts of functional accounting and explain them.
Admin: cover the costs of running the organization, such as office rent and staff salaries
Program: support the organization's mission-driven activities
Fundraising: Expenses that are incurred to raise money for the organization's mission, including event costs and marketing materials
Explain the Budget Equation:
(P 1 x Q 1 ) + (P 2 x Q2 ) + (P3 x Q3 )
+................ (P X x QX ), where Q = (W*S),
P= Price, Q= Quantity
Quantity= Weight x Scale
This is a group that oversees the audit process and financial reporting
Audit Committee
Name 3 sources of revenue for public entities
Taxes, fees, fines, licenses, transfers.
This categorizes transactions by: Fund (source of the money), Function (purpose of transaction), Object (type of expense), and Cost Center (where the cash was spent)
Chart of Accounts
What is the purpose of The Uniform Prudent Management of Institutional Funds Act (UPMIFA)
The UPMIFA provides guidance and authority to organizations regarding the management and investment of funds held by them
List out what PODSCORB(L) stands for
What is the Accounting Equation?
Assets - Liabilities = Net Assets
What is this? FV=PV x (1+r)n
The Future Value of Money Equation
PV= Present Value; r= interest rate; n=time
This Act mandates audits for entities receiving over $750,000 in federal funds
Single Audit Act
What is the difference between Designated Funds & Restricted Funds
Restricted funds have limitations on their use imposed by the donor, while designated funds are set aside by an organization for a specific purpose within its overall budget.