BUSN642: Nonprofit Chart of Accounts
A chart of accounts in the most basic definition is a list of accounts that is used to show the various accounts that meet the needs of the organization; and although all chart of accounts may contain some general areas of focus and categories, each organization may vary in some of the details of the accounts listed. The larger and more complex an organization may be, the more accounts it may have, which is why it is important that chart of accounts be numbered in a logical way and follow any standards for its specific industry (NetMBA, n.d.). Accounts will vary according to the organization. Many organizations may now use accounting software to aggregate information into their financial statement (Accounting Tools, n.d.). The chart of accounts is important because an organized list of accounts data lays the foundation for keeping track of any transactions going in and out of the organization and provides the status of the accounts to those making decisions internally …show more content…
An organization, especially businesses, may have each department be responsible for its account (Accounting Coach, n.d.). Some accounts, such as travel and meal expenses, entertainment, advertising, need to be included in the chart for tax reporting purposes, regardless if a Form 990 is filed or not (NetMBA, n.d.; Nonprofit Accounting Basics, 2009). The National Center for Charitable Statistics (NCCS) along with several other support organizations support the Unified Chart of Accounts which sets a standardized order for organizations to follow and can easily translate their financial statements into categories for the IRS Form 990 (NCCS, n.d.). The chart of accounts can also be used to record transactions and many accounting systems require a minimum of two accounts per transaction, at least one account is debited and at least one is credited (Accounting Coach,
A chart of accounts in the most basic definition is a list of accounts that is used to show the various accounts that meet the needs of the organization; and although all chart of accounts may contain some general areas of focus and categories, each organization may vary in some of the details of the accounts listed. The larger and more complex an organization may be, the more accounts it may have, which is why it is important that chart of accounts be numbered in a logical way and follow any standards for its specific industry (NetMBA, n.d.). Accounts will vary according to the organization. Many organizations may now use accounting software to aggregate information into their financial statement (Accounting Tools, n.d.). The chart of accounts is important because an organized list of accounts data lays the foundation for keeping track of any transactions going in and out of the organization and provides the status of the accounts to those making decisions internally …show more content…
An organization, especially businesses, may have each department be responsible for its account (Accounting Coach, n.d.). Some accounts, such as travel and meal expenses, entertainment, advertising, need to be included in the chart for tax reporting purposes, regardless if a Form 990 is filed or not (NetMBA, n.d.; Nonprofit Accounting Basics, 2009). The National Center for Charitable Statistics (NCCS) along with several other support organizations support the Unified Chart of Accounts which sets a standardized order for organizations to follow and can easily translate their financial statements into categories for the IRS Form 990 (NCCS, n.d.). The chart of accounts can also be used to record transactions and many accounting systems require a minimum of two accounts per transaction, at least one account is debited and at least one is credited (Accounting Coach,