![]() Also referred to as a Statement of Financial Position.īalloon payment: The final payment of a loan when the amortization is longer than the maturity of the underlying note. Bīalance sheet: A report showing the financial condition – Assets, Liabilities, and Net Assets – of the organization at a particular moment in time. An essential component of the audit is the Opinion Letter. The most rigorous level of external financial statement preparation. The amount is often an estimate based on experience or trends in the industry.Īmortization: The repayment schedule for a loan or other obligation, usually as a constant amount each month that is paid first to the interest calculated on the principal balance, and then to reduce the principal balance.Īssets: What is owned by the organization.Īudit: A financial report that has been tested and verified for accuracy by a Certified Public Accountant (CPA) and prepared in accordance with Generally Accepted Accounting Principles. The alternative is cash-basis accounting.Īccrued expense: Costs for services received by the organization that have accumulated, but are not yet due or payable.Īccrued interest: Interest costs that have accumulated, but are not yet due or payable.Īllocation: A method of accounting that divides expenses among different program, administrative, and fundraising categories based on a formula that recognizes the use of the resources such as use of the facility or staff time.Īllowance for doubtful accounts: An amount reflecting the portion of the accounts receivable which the organization reasonably believes it may not collect. when services or merchandise is provided by the organization, or the organization receives a commitment of a contribution) rather than when cash is paid or received. ![]() when a bill is received for merchandise or services provided to the organization) and as income when it is earned (i.e. Referred to as grants receivable when the amount is related to a grant agreement.Īccrual-basis accounting: A system of financial recordkeeping in which transactions are recorded as expenses when they are incurred (i.e. This glossary provides definitions of terminology commonly used in nonprofit finance.Īccounts payable: The amount owed to others for services or merchandise received by the organization.Īccounts receivable: The amount owed to the organization for services or merchandise provided to others. ![]()
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