What is fund accounting? How does it differ from a general business accounting system?
Fund accounting is a specialized form of double-entry accounting often used in churches and other nonprofit organizations. In fund accounting, the equity section of the balance sheet is properly titled the fund equity section and contains an account for every designated and undesignated fund. Income and expense accounts often referred to as sources of funds (income) and uses of funds (expenses) automatically link with the associated fund equity account. This makes it possible to automatically update fund balances whenever a transaction effects an associated income or expense account. Business accounting system can not do this. The system has numerous reports including a balance sheet and a report known as Statement of Sources and Uses of Funds and Changes in Fund Equity. This report is similar to the profit and loss statement found in commercial accounting systems. Sound complicated? Remember that the CMTS for Windows bookkeeping system may be implemented in Basic Mode as well as Doubl
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