Vocabulary
bills that need to be paid to you
What are invoices receivable?
Assets = liabilities + equity
What is the accounting equation?
a financial report that shows a company's income and expenditures during a set period.
What is an income statement?
What is a Statement of Activities?
GAAP
What are Generally Accepted Accounting Principles?
(implementation guide to tax code)
one of the most common nonprofit classifications, this is the tax-exempt classification of WI-AIMH
What is a 501(c)(3)?
money received (incoming money)
What is revenue?
What is gross income?
This principle states that the same accounting methods should be used for similar items over time
What is the Consistency Principle?
This statement shows a company's assets, liabilities, and equity at a point in time
What is a balance sheet?
What is a Statement of Financial Position?
FASB
What is the Financial Accounting Standards Board?
(the tax code)
federal agency governing nonprofit status and classification
What is the IRS?
net income (or income after expenses)
What is profit?
This principle states that expenses should be recognized in the same period as the revenues it helped generate
What is the Matching Principle?
a statement that shows where cash is obtained and where it's spent
What is a Statement of Cash Flows?
AICPA
What is the American Institute of CPAs?
(audit & accounting guides)
True/False: All donations to any type of nonprofit are always tax-deductible.
False
these can be given with donor restrictions or without donor restrictions
What are contributions?
The process of dividing expenses among Classes/Functions
What is cost allocation?
The minimum number of GAAP-required financial statements that an org has to produce
What is 4?
The outcome of this investigative process is a Management Letter stating any control deficiencies or material weakness
What is a financial audit?
this is a type of tax that nonprofit organizations DO have to pay
What is Social Security taxes on wages?
What is Medicare taxes on wages?
recording an expense (or contribution) in a future time period to match an activity
What is realization?
WI-AIMH Membership dues are not tax-deductible because they are considered this type of transaction...
What is an exchange transaction?
**Note: if our dues were significantly higher, a portion could be considered an exchange and a portion considered a contribution** (Part-Exchange Transaction)
the accounting method that nonprofit organizations should use
What is the accrual method?
this is the worst possible outcome(s) of a financial audit
What is an adverse modified opinion?
What is a material weakness?
the number of different nonprofit organization types (according to the IRS)
What is 27?