Accounting and Financial Management Governance – Balance Sheet
The Balance Sheet represents the financial position of the University and Business Areas at a particular point in time. The Balance Sheets are represented as Assets, Liabilities, and Equity/Fund Balance/Net Position.
Assets
Assets represent resources available to meet current obligations
Examples: Cash, Receivables and Capital Assets
Asset GL’s start with 1XXXXX
All Asset GL’s, except for Allowances, should be a Debit balance
Allowance accounts should be a Credit balance
Cash
GL’s 101400 – 101425
System Generated
Business Areas cannot post directly to cash GLs
General Fund cash is allocated to Business Areas when the budget is posted (49500X)
Expenses use cash throughout the year
At the end of the year, the remaining balance is carried forward
Change in Revolving Funds
GL’s 10145X
The terms change fund, cash fund, and revolving fund are often used interchangeably
Usage is limited to approved areas only
FI-AR Recon Account
Travel Receivables
GL 102530
Used for expenses that occur on a travel card or cash advances approved by the Travel office
The traveler prepares an expense report and expenses owed back will credit this GL to reduce the receivable
Reconciled monthly by Accounting
Inventory
GLs 107xxx
GL 107180 is EAM inventory – system generated postings
Other inventory GLs are recorded by departments
Capital Assets
GLs 155xxx – Original acquisition values of capital assets
GLs 156xxx – total accumulated depreciation of capital assets
The sum of the 155xxx & 156xxx GLs is the net book value of the capital assets
Backstop Receivable
190060 Backstop Receivable (Asset)
GL 190060 posts as transfer CI 496100 in FM
Currently only for capital projects, and must have approval to use
Liabilities
Liabilities represent obligations to pay for a product received or a service provided
Examples: Vendor and S&W Payables
Liability GL’s start with 2XXXXX
Typically, Liability GL’s should be a Credit balance
Vendor Payables
GL 201010 – vendor payables for payments pending to be paid to vendors
GL 201015 – GRIR
GL 201071 & 201080 – vendor payables related to SUA payments to vendors
Sales and Innkeepers Tax
GL’s 201300 – 201315
Amounts collected from customers for sales tax are recorded by Business Area as a liability
The tax department will clear the liability amounts from Business Areas with each payment of the tax
S&W Payables
GLs 202010 & 202020
System generated monthly accrual for salary & wages payable
Backstop Payable
290060 Backstop Payable (Liability)
GL 290060 post as transfer CI 496100 in FM
Currently only for capital projects, and must have approval to use
Equity
Equity represents the financial position and ability to pay future obligations (liabilities)
GL’s start with 3XXXXX
Balances do not change during the fiscal year
At year-end (June 30th), revenue and expenses close to the equity GL’s and the new balance carries forward on the balance sheet in period 0New fiscal year revenue and expense will accumulate during periods 1-12
Commitment Item Hierarchy
Academic Areas
Best Practices
- Debits and credits should be consistent with the type of Balance Sheet account.
- Balances should be adjusted daily, monthly, quarterly or monthly depending on the type of Balance Sheet account.
- Balances that are unchanged for multiple fiscal years should be understood taking into consideration the current (less than one year) versus long term (greater than one year) resource or obligation.
- Physical Access/Safeguarding
- Internal Control/Separation of Duties
- Review Z100 at year end and for the current operating period.
- Drill into by Fund
- BPR Capital Assets Conversion GL’s
- Assets retired in the legacy fund’s/ba’s
- Asset value credited, accumulated depreciation debited
- 568020 – Plant Assets Retired debited for NBV
- 380010 – Fixed Asset Conversion Acct credited for NBV to offset net equity impact of 568020 entry
- All entries were statistical in FM
- Asset value debited, accumulated depreciation credited
- Assets recapitalized in the new structure
- 568020 – Plant Assets Retired credited for NBV
- 380010 – Fixed Asset Conversion Acct debited for NBV to offset net equity impact of 568020 entry
- All entries were statistical in FM
- Assets retired in the legacy fund’s/ba’s