Glossary
| Term | Definition |
|---|---|
| Accounting Equation | Assets = Liabilities + Equity* Note: At IU, equity is the equivalent of fund balance. |
| Accrual Accounting | Accrual accounting is a method that records revenue when it is earned and records expenses when they are incurred, not when the cash is received. Different than cash accounting, this method provides a more realistic understanding of income and expenses and helps with long-term projections. |
| Agency Funds | Funds held by an institution as custodian or fiscal agent for others such as student organizations, individual students, or faculty members. The agency fund is divided between internal and external fund recording. |
| Aging Report | An accounts receivable aging report is a record that shows the unpaid invoice balances along with the duration for which they’ve been outstanding. |
| As of Date | The as of date is the date specified in the parameters and shows the cut-off date of the information provided. |
| Auxiliary Enterprise Funds | Auxiliary enterprise funds furnish goods or services either internally or externally and charge a fee directly related to the cost of the goods or services. The auxiliary enterprise fund at IU is broken out between auxiliary funds and service funds. |
| Auxiliary Funds | Auxiliary funds are an enterprise that furnishes goods or services to students, faculty, or staff and charges a fee directly related to, although not necessarily equal to, the cost of the goods or services. This means that the entity is self-supporting. |
| Balance Sheet | A balance sheet, also known as the statement of financial position, is a financial statement that reflects the overall financial position of an organization at a specific period in time. |
| Cash | Cash is money in coins or notes, as distinct from checks, money orders, or credit. |
| Cash Basis | Accounting method which records revenues and expenses only when monies are exchanged. |
| Cash Equivalent | Cash equivalents are short-term assets that are easily and readily converted into a know amount of cash. |
| Cash Flow Statement | A cash flow statement, also known as statement of cash flows, is a financial statement that summarizes the amount of cash and cash equivalent entering and leaving an entity. |
| Cash Receipt | Cash receipt is the collection of money (currency, coins, checks). A company’s receipts refers to the cash that the company received. |
| Chart of Accounts | A chart of accounts (COA) is a financial organizational tool that provides a complete listing of every account in the general ledger of a company broken down into subcategories. The chart of accounts can be expanded and tailored to reflect the operations of the company. |
| Clearing and Rotating Funds | The clearing and rotating fund group is specific to IU and is used to record interim accounts that should be closed out (net to zero) at the end of the fiscal period. To post to this fund group, please reach out directly to the UCO cash accounting team prior to posting entries. |
| Compound Annual Growth Rate (CAGR) | The compound annual growth rate (CAGR) is the average rate of return a fund has earned over the preceding defined number of years. |
| Construction Funds | Construction funds are a subset of the plant funds and used for the acquisition of plant assets. |
| Contra Asset | A contra asset object code is an offset to another asset code (i.e. accounts receivable or capital assets) and typically acts as a reserve to reduce the associated asset code. |
| Contract and Grant Funds | Sources of funds include federal grants and contracts, state grants, special appropriations, and gifts and grants from private sources. Restricted C&G funds should not be recorded in this fund group until the terms of the agreement under which they were given to the university have been met. C&G funds are subject to Uniform Guidance. |
| Credit | A credit is an accounting entry that either increases a liability or equity account, or decreases an asset or expense account. |
| Current Liability | A current liability is an obligation that is expected to be settled within twelve months. |
| Debit | A debit is an accounting entry that either increases an asset or expense account, or decreases a liability or equity account. |
| Designated Funds | Designated funds are the use of unrestricted funds for institutional designated purposes such as specific activity or project. Most designated funds are now budgeted and most have a multi-year life. The designated fund includes several major sub-fund such as continuing education, public services, etc. |
| Encumbrances | A main concept of government accounting, an encumbrance is a restriction placed on the use of funds to ensure there are enough funds for future expenses/obligations such as salary, loan payments, etc. |
| Endowment Fund | Endowment funds are funds with respect to which donors or other outside agencies have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity and invested for the purpose of producing present and future income which may either be expended or added to principal. |
| Expense | Expenses are defined as the cost incurred to do business or the outflow of resources associated with the general operations of an entity. |
| External Agency Funds | This fund group is in direct relationship with the university mission and acts as reimbursement to the university for use of university property or service. This fund is managed by individual campuses and fiscal officers. |
| External Encumbrance | External encumbrances are reservation of funds to cover obligations arising from external activities such as when a purchase order is approved to reserve funds payable to a vendor. Encumbrances project future expenditures and provide fiscal officers with a more accurate representation of an accounts available balance. |
| Financial Accounting Standard Board (FASB) | The organization responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States. |
| Fiscal Period | A fiscal period at Indiana University is broken out into 12 separate periods based on months in the calendar year. Period one is equivalent to July during the fiscal year. |
| Fiscal Year | A fiscal year at Indiana University spans from July 1st through June 30th of the subsequent calendar year. The last day of the fiscal year is June 30th. |
| Fund Accounting | Fund accounting is an accounting and reporting system commonly employed by independent colleges and universities to keep track of resources whose use is limited by donors, granting agencies, law, other outside individuals or entities or by governing boards. A fund is maintained for each specific purpose. |
| Fund Balance | Fund balance is essentially the difference between assets and liabilities. In general, it is the balance remaining after the assets have been used to satisfy the outstanding liabilities. |
| General Funds | General Funds are primarily unrestricted funds of the university. The general fund is budgeted annually and the main sources of funds are student fees and state appropriations with matching expenditures. |
| Generally Accepted Accounting Principles (GAAP) | US Generally Accepted Accounting Principles (US GAAP) is the combination of authoritative standards (requirements) and the commonly accepted ways of recording and reporting accounting information. |
| Governmental Accounting Standards Board (GASB) | The organization responsible for establishing accounting and financial reporting standards for state and local governments and those entities that are funded by state and local government. |
| Income Statement | An income statement, also known as the statement of revenues, expenses, and changes in net position, is a financial statement that summarizes the revenue streams, expense categories, and overall profitability of an entity. |
| Internal Agency Funds | Internal agency funds acts as the fiscal agent or trustee for the university. For financial reporting purposes, this fund group balance is reported as unrestricted at fiscal year-end. Common uses of this fund include withholdings for taxes for employees and sales tax. This fund group is managed internally by UCO. |
| Internal Encumbrance | Internal encumbrances are a reservation of funds to cover obligations arising from internal activities that are chargeable to, but not yet paid from, a specific account (i.e. salary commitments, faculty travel, etc). Encumbrances project future expenditures and provide fiscal officers with a more accurate representation of an accounts available balance. |
| Investment in Plant Funds | The investment in plant funds are a subset of the plant fund whose funds used for the purchase of capital assets. The fund is also used to record bonds and notes payable. |
| Journal Entry | Journal entries are records of business transactions. A business transaction is the exchange of goods or services for a form of payment. A journal entry is used to record each transaction and include more information about the transaction such as date, amount, description of the entry, and a unique reference number, often called a journal entry number. |
| Liability | A liability is a debt or obligation that arises from past events. |
| Life Estate Funds | Life estate funds are funds contributed to an institution subject to the requirement that the institution periodically pay the income earned to designated beneficiaries. |
| Loan Funds | The loan funds consist of loans to students, faculty, or staff, and of resources available for such purposes. Many are temporary and require repayment of principal and interest while some specify forgiveness of repayment under certain conditions. These funds are derived from private and governmental gifts and grants, federal borrowing, and unrestricted allocations. Interest revenue is returned to this fund as an increase to the available fund balance. Examples of loans included in the loan fund include Federal Perkins Loans, health professional loans, nursing loans, and institutional loans. |
| Materiality | Highlights any variance that meets the specified materiality threshold specifically for the income statement. Materiality is set at 10% of the associated revenue stream. |
| Non-Current Liability | A non-current liability is an obligation resulting from a previous event that is not due within one year. Non-current liabilities are also known as long-term liabilities. |
| Non-Routine | An isolated transaction that will not recur on a regular basis. |
| Normal Balance | A normal balance is the side of the T account where the balance is normally found. When an amount is accounted for on its normal balance side, it increases that account. On the contrary, when an amount is accounted on the opposite side of its normal balance, it decreases that amount. |
| Operating Revenue and Expense | Operating revenues and expenses are defined as amounts associated with day-to-day operations of a business. These amounts are typically used to analyze the financial health of the organization and determine future cash needs. |
| Other Funds | Other funds incorporates any other funding that does not fall in the traditional classifications. This is rarely used and users are discouraged from using this fund. |
| Other Restricted Funds | Other restricted funds are expendable for operating purposes, but restricted by donors or other outside agencies as to the specific purpose for which they may be expended. Commonly used other restricted funds include fellowships, scholarships and special state appropriations. |
| Pre-Encumbrance | An unofficial encumbrance, pre-encumbrances are used to reserve funds in anticipation of an official encumbrance created with a purchase order, travel authorization, or salary transaction. |
| Proprietary Funds | Proprietary funds are used in governmental accounting to account for business-type activities that are financed in whole or in part by fees charged to external parties for goods or services. |
| Quasi Endowment Funds | Quasi endowment funds are funds which the governing board of an institution or university management, rather than a donor or other outside agencies, have determined are to be retained and invested. |
| Reconcile | The review of operating reports monthly to ensure that the revenue and expenditures posted to the account are those that were approved by the fiscal officer, or their delegate, and that they are allowable and appropriate. |
| Renewal and Replacement Funds | Renewal and replacement funds are a subset of the plant fund whose funds are set aside for replacement of renewable property. An example of use of replacement funds is the purchase of computer replacement. |
| Restricted Other Funds | Derived from indirect cost recovery, educational and administrative allowances, unrestricted gifts, and revenues from intellectual property (patents, copyrights, royalties). |
| Retirement of Indebtedness Funds | The retirement of indebtedness funds are a subset of the plant funds and used for long-term capital financing and debt. |
| Riley Hospital Endowment Funds | Riley Hospital endowment funds contributed to IU are directly related to the Riley Hospital. Similar to quasi endowment funds, interest income is reinvested at year-end. |
| Routine | Transactions that happen on a recurring basis. |
| Service Funds | Service funds are an enterprise that furnishes goods or services to other internal university departments and charges a fee directly related to, and equal to, the cost of the goods or services. This means that the entity is self-supporting, but is not allowed to make a profit. |
| T-Accounts | A tool used to help identify the ending balance of a given asset, liability, revenue, or expense. The left side is for debits and the right side is for credits. |
| Unearned Revenue | Unearned revenue is a liability account that reports amounts received in advance of providing goods or services. When the goods or services are provided, this account balance is decreased and a revenue account is increased. |
| Work Study Agency Fund | The work study agency fund is used to track money received for federal work study and is managed internally by UCO payroll. |