Following the assets are liabilities. This is where an organization must account for everything they owe. Within the charts of account, liabilities are numbered in the 2000's (Scarano, 2016). A nonprofit might have items in the liabilities category such as mortgages and accrued expenses (Scarano, 2016). By providing a detailed list of the money that an organization owes, they can better allocate funds to those areas. An organization's equity (also referred to as net assets) is the third category. The net assets are found in the 3000 range. In this category, a nonprofit would take their assets and subtract the amounts found in the liabilities category. The amount that this simple equation provides is what the organization's net worth is. For a nonprofit organization, they would refer to the net worth as the fund balance (Scarano, 2016). Revenue is the fourth category, and have numbers assigned to items ranging in the 4000's. Revenue accounts for money coming into the organization (Scarano, 2016). For a nonprofit organization, some of the common ways to raise funds are …show more content…
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Retrieved July 13, 2017, from https://www.accountingcoach.com/terms/C/chart-of-accounts
Cullinane, M. (2014, June 26). Nonprofit board vs. executive director. Who does what?
Retrieved July 14, 2017, from https://cullinanelaw.com/nonprofit-board-vs-executive-director
Scarano, J. (2016, May 16). What Makes the Chart of Accounts for Nonprofits Unique.
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