| Accounting Principles |
Accounting principles are general rules and guidelines that entities must follow in order to accurately report their financial statements. |
| 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. |
| Approver |
Person who is responsible for reviewing and approving a non-exempt staff member’s recorded hours in a university-managed timekeeping system. The Approver should have direct knowledge of the non-exempt staff member’s hours worked and attendance; typically, the Approver is the non-exempt staff member’s direct supervisor. |
| As of Date |
The as of date is the date specified in the parameters and shows the cut-off date of the information provided. |
| Cash Receipt |
Cash receipt is the collection of money (currency, coins, checks). A company’s receipts refers to the cash that the company received. |
| 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. |
| Credit |
A credit is an accounting entry that either increases a liability or equity account, or decreases an asset or expense account. |
| Debit |
A debit is an accounting entry that either increases an asset or expense account, or decreases a liability or equity account. |
| 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. |
| Equivalent Original Receipts |
An equivalent original receipt is IU’s standard practice that receipt documentation be submitted electronically as a PDF file for supporting documentation. The submission attests the submitted document is the equivalent of original receipt documentation. The submission attests the paperwork will not be submitted for any other reimbursement or disbursement. |
| Expenses |
Expenses are defined as the cost incurred to do business or the outflow of resources associated with the general operations of an entity. |
Fiscal Officer
|
A person who is trained and hired for the purpose of providing fiscal, policy, and internal control management of all funds in a unit, and is responsible for ensuring that processes and related controls have been established to achieve the organization’s mission and objectives. |
| 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 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 Ledger |
The general ledger (GL) acts as a repository of all financial and budget information. The GL contains all the financial transactions that are created via Kuali Financials documents, fed in from external systems, or created during batch processing. |
| 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. |
| Liability |
A liability is a debt or obligation that arises from past events. |
| Liquidity |
Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets while tangible items are less liquid. |
| 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. |
| Nonaccountable Plan |
A nonaccountable plan is an arrangement that does not meet one or more of the three requirements (business connection, substantiation, return of funds) of the accountable plan. Amounts paid under this arrangement are included in the employee’s gross income, must be reported as wages or other compensation on the employee’s Form W-2, and are subject to withholding and payment of employment taxes. Amounts for non-employees are reportable on a Form 1099-MISC. |
Non-Exempt Employee
|
Employees who are subject to the minimum wage, overtime pay, recordkeeping, and youth employment standards of the Fair Labor Standards Act of 1938, as amended. The term includes part time, temporary work-study, support and service staff, and professional overtime-eligible staff. |
| Reasonable Period of Time |
The IRS has established “safe harbors” which can be used to ensure reasonableness. These safe harbors state, based upon a fixed date, an advance made within 30 days of when an expense is paid or incurred, an expense substantiated to IU within 60 days after it is paid or incurred or return date of trip, or an advance amount returned to IU within 120 days after an expense is paid or incurred, will be treated as having occurred within a reasonable period of time. Payments not meeting these safe harbor guidelines are considered taxable income to the individual unless extraordinary circumstances are documented. |
| 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. |
