22315616
Descrição
FlashCards por Sasha Elliott , atualizado more than 1 year ago
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Criado por Sasha Elliott
mais de 4 anos atrás
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| Questão | Responda |
| Accounting Cost | The amt. of money needed to buy, do, or make something |
| Accounting Equation | Assets = Liabilities + Net Assets Equation that defines the relationship between assets, liabilities and net assets: The foundation of double-entry bookkeeping |
| Accounting Principles | Basic accounting guidelines that serve a general rule for the accounting system |
| Accounts Receivable | Money that other orgs. or individuals owe the nonprofit |
| Accrual Accounting | Accounting system that recognizes income when it is earned and expenses when they are incurred in the same reporting period, rather than when income is received or expenses are paid |
| Accrued Salary Expense | Money the nonprofit owes at the end of an accounting period |
| Adopted Budget | Budget that the nonprofit's board of directors has approved |
| Allocation | Designation of funds for a particular purpose |
| Annuity | Fixed sum of money distributed on a regular basis, whether monthly, quarterly, yearly, or at some other regular interval |
| Assets | Things that have value, can be measured, and are owned or controlled by the nonprofit |
| Audit | Procedure in which a nonprofit's financial accts. are verified by a professional accountant |
| Average Cost | Total cost of all items divided by the number of items |
| Balance Sheet | Statement of financial position that summarizes an org.'s financial situation at one point |
| Benefit Corporation (B Corp.) | Corporation that seeks to have a positive impact on society & the environment. B corps. redefine fiduciary responsibility to include non-financial interests when making decisions & report their impacts on society & the environment using 3rd party standards. |
| Benefit-Cost Ratio (BCR) | A measure of program efficiency; the ratio of the benefits of a project relative to its costs, all expressed in monetary terms Also known as cost-benefit ratio |
| Benefit Theory | Classifies the benefits that n/p orgs. generate into 4 broad categories based on goods and services they provide: Private / Group / Public / Trade Np should seek support from beneficiaries and/or those who value the benefits |
| Bonds | Debt securities that are essentially long-term contracts between issuers (borrowers) and investors (lenders) Borrowed money + agreed-upon amt. of interest is paid back within a certain period of time |
| Break-Even Analysis | Method of determining at what point total costs = total revenue |
| Capital Assets | Long-lasting and big-ticket items of value held by a nonprofit, typically including land, facilities, and equipment |
| Capital Budgeting | Planning process used for the purchase of fixed assets, such as purchasing or renovating a building. The capital budget has close links to the operating budget. |
| Cash Budget | Month-by-month management plan for the most important part of the fiscal health of a nonprofit - the expected revenues & expenses and the difference for each month of the fiscal year |
| Cash Flow | Cash receipts and cash disbursements over a given period |
| Cash-Flow Budget | A projection of cash receipts and cash disbursements over a given period. Also known as cash-flow forecast |
| Cash-Flow Gaps | Periods when cash outflows exceed cash inflows |
| Cash-flow Management | The process of forecasting, monitoring, analyzing, and adjusting cash flows so that an organization stays within a liquidity range |
| Cash-flow Management Report | An internal document created to inform a nonprofit's leadership about times the nonprofit may run short of cash even with a balanced annual budget. Also known as cash management report |
| Cost | Amount paid or required for something often referred to as cost objective |
| Cost-Benefit Analysis (CBA) | A method of determining whether or not a certain project should be done. CBA involves finding and qualifying all the positive factors (benefits) and all the negative factors (costs) of a proposed action and determining the difference between them (the net) to decide whether or not the action is advisable |
| Cost-Benefit Ratio | The measure of program efficiency; the ratio of the benefits of a project relative to its costs, all expressed in monetary terms. Also known as benefit-cost ratio |
| Coupon Rate | Annual interest rate payable to a bondholder as printed on the bond |
| Current Assets | Those assets that are cash or can be turned into cash within a short period of time |
| Current Liabilities | Debts to be paid within a short period of time. Also known as payables |
| Default Risk | The risk that investors may lose part or all of their security-invested principal and interest because of a lack of financial soundness on the part of the security or the company that issued the security |
| Depreciation | The assigning of a value to the useful life of a capitalized fixed asset and then expending those assets over its economic life |
| Direct Costs | Costs that can be tracked to a product, program or a cost center |
| Discount Rate | The interest rate used to discount future cash flows to determine the present value of an investment |
| Diversification | The balancing of revenue sources across entities with the aim of achieving greater financial security |
| Effectiveness | Achievement of a program's or a nonprofit's long-term targets/outcomes |
| Efficiency | The ratio of useful output to the total input used to create the output |
| Endowment Draw | The annual amount taken from an endowment that is to be used for general operating purposes each fiscal year |
| Endowment Funds | Restricted funds in which the principal is invested in perpetuity and its income is used to support the operation of the nonprofit for its designated programs |
| Expense Budget | A budget that tells how much will be spent for a given period, usually a fiscal year |
| Fiduciary | An individual or organization holding assets for another party |
| Financial Accounting | The preparation of financial statements of an organization's past revenues and expenses. These financial statements are used primarily by parties outside the organization who might have a particular interest in the organization. |
| Financial Accounting Standards Board (FASB) | The designated organization in the private sector for establishing the financial accounting standards that govern the preparation of financial reports by nongovernmental entities |
| Financial Statements | Written reports of an organization's financial activities. Nonprofits typically produce 4 financial statements: Statement of Financial position, activities, cash flow and functional expenses |
| Fiscal Year (FY) | Any period of 12 months chosen by an organization as its budget year, the period within which revenues and expenses are estimated and tracked |
| Fixed Costs | Expenses that do not vary with volume |
| Form 990 | A form that most nonprofits must file annually with the IRS. The information in Form 990s, generally available to the public, allows easy comparison of one nonprofit to another |
| Fund Accounting | Accounting system used by nonprofits that emphasizes accountability rather than profit. Fund accounting allows nonprofits to keep separate set of funds, both revenue and expense, for particular programs. |
| Future Value | The value of cash or another type of asset at a future date that is equivalent in value to a specified sum now |
| General Obligation Bonds (GO Bonds) | Debt instrument issued by a state or local government to finance projects for the general public's benefit, such as libraries and schools. GO obligation bonds are secured by the "full faith and credit" of the issuing gov't. |
| General Support Revenue | Revenue available that is not specifically designated for use for a particular purpose. Also known as Unrestricted Revenue |
| GAAP Generally Accepted Accounting Principles | Widely accepted set of rules and procedures for the recording and reporting of financial info; created by the Financial Accounting Standards Board |
| Indirect Costs | Expenses for the nonprofit as an org. that cannot be directly attributable to particular programs |
| Inputs | The resources used in a performance measuring system, such as staffing, supplies, and money |
| Interest Rate | The % rate at which interest is charged on a loan for a period |
| Intergenerational Equity | A value concept based on the belief that future generations have rights to resources that the current generation must respect |
| Internal Controls | Rules put in place within an org. to achieve efficiency and effectiveness of operations, reliability of financial reporting and compliance with laws and regulations |
| Internal Rate of Return (IRR) | A measurement of the return on an investment. The IRR is the discount rate at which a project's net present value equals zero |
| Laddering | A method of structuring security terms so that a certain proportion of the investment matures every year over a few yrs. Laddering can reduce market risk, if used properly. |
| Leverage | The degree to which an org. is using debt to finance its activities |
| Liabilities | Sources of capital used to finance assets. Liabilities are debts the org. owes to 3rd parties and must be paid. |
| Life-Cycle Costing (LCC) | A method of determining all the costs of an asset over its lifetime (including maintenance and disposal costs, not just the purchasing price) |
| Line-Item Budget | A budget that lists individual costs of all budgeted items, such as personnel, supplies, and equipment |
| Liquidity | The extent to which an asset can be converted into cash without incurring extraordinary costs |
| Long-Term Assets | Assets such as property, buildings, and equipment that cannot easily be changed into cash in a short period of time |
| Long-Term Liabilities | Debts, such as mortgages, that are to be paid off over multiple years |
| L3C (Low-Profit Limited-Liability Co.) | A legal entity that facilitates investments in socially beneficial, for-profit ventures while complying with IRS rules concerning program-related investments |
| Management Accounting | A method of accounting that focuses on using an org.'s internal financial data to think through how the org. can be more efficient in its delivery of services or more effective in its accomplishment of program outcomes |
| Marginal Costs | Additional costs incurred to add one more unit of service or produce one more unit of goods |
| Market Risk | The risk that investors may lose part or all of their market-invested principal and interest because of changes in the marketplace in general, rather than problems with individual instruments or the orgs that issue them |
| Marketable Securities | Monies invested on a short-term basis (less than 1 yr) such as certificates of deposits and stocks |
| Mission | The purpose for which a nonprofit is formed |
| Modern Portfolio Theory (MPT) | Investment theory that provides the foundation for assets selection in a portfolio; the aim is to maximize expected return for a given amount of portfolio risk or to minimize risk for a given level of expected return |
| Municipal Bonds | Bonds issued by a city or state gov't or its agency to finance capital projects. Also known as munis |
| Net Assets | The difference b/w the assets and liabilities of an org. the accumulation of the difference b/w the cumulative revenues and cumulative expenses over the life of an org. |
| Net Present Value (NPV) | The difference b/w cash inflow and cash outflow, both discounted to their present values |
| Nonprofit Corporation | A legal entity incorporated in 1 of the 50 states and operating for educational, charitable, social, religious or civic purposes. Unlike a for-profit org. a nonprofit corp has a board or directors and officers but no shareholders |
| Nonsystematic Risk | The default risk of a specific corp or institution |
| Operating Budget | An org.'s adopted budget for the fiscal year that is amended and lists both revenue and expenses |
| Operating Reserve | A fund for unexpected events Often known as a rainy-day fund |
| Outputs | The results or products of the program activities in the nonprofit |
| Pay-as-you-go Financing | Cash financing: the saving up of funds to purchase particular assets |
| Permanently Restricted Funds | Funds that must be spent only for those purposes designated by the donor |
| Permanently Restricted Net Assets | Gifts received in a fiscal year for a nonprofit's endowment that may never be spent |
| Pledges | Promise made by donors to give cash, property, or other assets to an org. in the future |
| Prepaid Expenses | Current assets that have been paid by the nonprofit before they are incurred |
| Present Value | The value of cash or another type of asset on a given date of a future payment or series of future payments discounted to reflect the time value of money |
| Private Foundations | Nonprofit corporations that make grants mostly to nonprofits and usually raise those revenues from a single source |
| Private Goods | Goods and services of a private nature that are rival and excludable. (Ex. day-care service is a private good, benefiting the child and the child's family) |
| Program Budget | Revenues and expenses categorized by programs |
| Program-related Investments (PRIs) | Investments made by private foundations in for-profit ventures to support charitable activities |
| Proposed Budget | A budget that has been drafted but not yet been adopted by an organization's board of directors |
| Prudent Investor Rule | A revision to the prudent man rule that enlarges trustees' immunity for the loss of investments to include the entire portfolio |
| Prudent Man Rule | Legal principle that holds that the trustees or board of directors of an org. cannot be held responsible for a loss of investments by the org. as long as they were prudent in their decision making |
| Public Charities | Nonprofit corps. classified as 501(c)(3)s, that raise revenue from many sources to provide education, scientific, or social services |
| Public Goods | Goods and services that are characterized by a lack of rivalry and excludability and are provided without profit to all members of society |
| Receivables | Revenue earned from prior fiscal years' contracts but still not collected in cash |
| Revenue Bonds | Debt securities issued for facilities that generate revenue by which the bondholders will be repaid, such as airports and tollroads |
| Revenue Budgets | Budgets that tell how much revenue will be raised to support particular programs or nonprofits |
| Revenues | The monies collected by a nonprofit. Revenues come from many different sources, including contributions (gifts), grants and contracts, fees, interest income and dividends, investment gains, donated services, donated materials, and securities |
| Sarbanes-Oxley Act | The 2002 federal law that requires publicly traded corps to adhere to governance standards that include a broad role for corporate boards in corporations' finances and auditing procedures |
| Separation of Duties | A fraud prevention measure that involves requiring more than one person to complete a given financial task within an org. |
| Serial Bonds | Bonds of issues that feature maturities every year over a period of years |
| Social Enterprises | Orgs. or ventures that achieve their primary social or environmental missions using business methods |
| Social Entrepreneurs | Individuals or orgs. that pursue innovative solutions to society's most pressing and social problems |
| Solvency | The state of having enough assets to cover all debts |
| Spending Baseline | An est. of how much it will cost to continue the current year's programs with the same labor and materials next year with next year's costs |
| Step Costs | Costs that are constant for a given level of activity but increase or decrease, often significantly, once a threshold is crossed |
| Systematic Risks | Market risks wherein the prices of all securities decrease or increase simultaneously. Systematic risk is the result of the general ebb and flow of the market as a whole. |
| Temporarily Restricted Net Assets | Revenues restricted by time & action, often in the form of gifts received in a fiscal yr. for use in a specific future fiscal yr. Nonprofits are required to report any revenue that they cannot currently spend but can spend in the future or can spend only for restricted purposes |
| Term Bonds | Bonds of an issue that feature a large block of bonds maturing in an single yr. |
| 3rd Sector | The nonprofit sector The economy in general can be divided into 3 sectors: Government, Business & NPs |
| Time Value of Money (TVM) | The concept that $ available now is worth more than the same amt. in the future because of its potential earning capacity. This core principal of finance holds that, provided $ can earn interest, any amt. of $ is worth more the sooner it is received. |
| Total Revenue | Total Revenue = Income + Capital Appreciation Income is interest paid by fixed-income investments & dividends by equity securities. Capitol Appreciation represents increase in the market price of the equity investment. |
| Unrestricted Net Assets | Revenues that are not restricted in their use; these include gifts received in a fiscal year for use in the fiscal year |
| Variable Costs | Expenses that change in proportion to volume |
| Variance Reports | Regular reports, monthly or weekly, that list revenue and expense budgets and actual expenses to date. Such reports allow nonprofit E.D.s to understand which revenues are slow to come in and whether or not any particular line items are over or underspent |
| Venture Philanthropy | Venture capitalism used for philanthropic goals. Funding on a multiyear basis; focus on capacity building rather than programs, high involvement by donors (who often join the board) and focus on measurable results |
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