The detailed classification and definitions of clearing accounts with explanation of the use of clearing accounts and their relationship to the regular receipt and expenditure accounts will be found in chapters 5 and 6. OTHER OPERATION ACCOUNTS 1800 SERIES 1810. STUDENT-BODY ACTIVITIES 1811. ATHLETICS 1812. SCHOOL ENTERTAINMENTS 1813. SCHOOL PUBLICATIONS 1814. SCHOOL CLUBS AND OTHER CO-CURRICULAR ACTIVITIES 1610. CURRENT AND SHORT-TERM LOANS 1620. DEDUCTIONS FROM PAYROLL FOOD SERVICES OPERATION ACCOUNTS 1700 SERIES 1710. MONEY RECEIVED 1711. MONEY RECEIVED FROM THE STATE 1712. MONEY RECEIVED FROM OTHER SOURCES 1720. MONEY PAID OUT CHAPTER 1 Classification of Receipt Accounts THIS CHAPTER contains the classification of standard receipt accounts included in this handbook. The classification is designed to accommodate the needs of both small and large school districts. It contains minimum essentials for all school districts and provides additional standard accounts for those districts that may wish to go beyond the minimum. ADAPTING TO FUND ACCOUNTING A FUND is a sum of money or other resources set aside for specific activities of a school district. The fund accounts constitute a complete entity and all of the financial transactions for the particular fund are recorded in them. The number and kinds of funds employed depend upon local and State law or regulations. An ACCOUNT is a descriptive heading under which are recorded financial transactions that are similar in terms of a given frame of reference, such as purpose, object, or source. The accounts shown in this chapter are the basic accounts which should be used in accounting for the receipts of any established fund. They are not solely for the general fund or any particular special fund.—When legal requirements or other considerations necessitate the establishment of individual funds for specific activities, appropriate standard accounts should be selected from those contained in this chapter to account for the receipts of the individual fund. It is quite likely that not all of the accounts in this chapter would be necessary or applicable to account for the receipts of any given fund. In setting up the accounts for a fund, its sources of receipts would determine which of the standard receipt accounts would be needed. That is, if the fund obtained revenue from different local sources, appropriate accounts would be selected from the classification utilizing the 10-40 Series of Revenue Receipt Accounts in accordance with the sources from which the money for the fund is obtained; for example: 11, TAXATION AND APPROPRIATIONS RECEIVED; 12, TUITION FROM PATRONS; 14-d, Rent from School Facilities; etc. If the fund also obtained nonrevenue receipts from bonds, account 50, SALE OF BONDS, would be used to account for such money. In a similar manner, the receipt accounts for any given fund can be assembled using the standard receipt accounts in this chapter. ADAPTING TO CASH AND ACCRUAL BASES The CASH BASIS of accounting is the basis under which revenues are recorded only when actually received, and only cash disbursements are recorded as expenditures. The ACCRUAL BASIS of accounting is the basis under which revenues are recorded when earned or when levies are made, and expenditures are recorded as soon as they result in liabilities, regardless of when the revenue is actually received or the payment is actually made. Falling between these two bases are various modifications. In some cases, most items of revenue and expenditure may be handled on the accrual basis, but certain items are handled on the cash basis. This is considered a slightly modified accrual basis. In other instances, revenue items may be handled on the cash basis while expenditures are handled on the accrual basis. This is known as the modified cash basis or modified accrual basis. This handbook is not recommending any particular basis over another. The accounts presented in this handbook are for use with any basis: cash, modified cash, or accrual. ADAPTING TO DOUBLE AND SINGLE ENTRY BOOKKEEPING The accounts shown in this handbook are for use with either method of bookkeeping, double entry or single entry. When used with either method, they will result in comparable financial data among school districts. The handbook makes no recommendation as to the method of bookkeeping that should be used. ACCOUNTING FOR RECEIPTS BY PROGRAM AREA This handbook recommends that receipts be recorded by source and method of production as indicated in the classification of receipt accounts. In some instances, school districts may need to account for receipts also by program area (for example, elementary day schools, secondary day schools). In such cases, the standard accounts may be divided into subaccounts for the program areas involved. (See also, ACCOUNTING FOR EXPENDITURES BY PROGRAM AREA, page 24.) |