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Bookkeeper 101 Presented By: Julie Laughlin Office of Accounting Services Archdiocese of Indianapolis Accounting Definitions Accounting - The system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results. Accounting Equation

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bookkeeper 101

Bookkeeper 101

Presented By:

Julie Laughlin

Office of Accounting Services

Archdiocese of Indianapolis

accounting definitions
Accounting Definitions
  • Accounting- The system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results.
  • Accounting Equation

Assets = Liabilities + Fund Balance

  • Assets - Things the business owns that have monetary value into the future. They carry a normal debit balance.
  • Cash- Money or the equivalent to money that the entity has control of at a particular time. It is considered an asset and carries a normal debit balance.
accounting definitions3
Accounting Definitions
  • Liabilities- Debts and accounts that are payable to creditors. Liabilities carry a normal credit balance.
  • Fund Balance - The accumulated, undistributed earnings of a parish.
  • Expenses - Costs of doing business or resources the entity used up to earn revenue. Expenses carry a normal debit balance
  • Revenue - All the income produced by a particular source. Revenues carry a normal credit balance.
accounting definitions4
Accounting Definitions
  • Balance Sheet -Statement of financial position that reports dollar amounts for assets, liabilities, and fund balance at specific point in time
    • Balance Sheet can also be referred to as the statement of financial position

Assets = Liabilities + Fund Balance

  • Income Statement -Statement of operations that reports revenues, expenses, and net income/loss for a certain period of time
balance sheet accounts
Balance Sheet Accounts
  • Assets -Normal Debit Balance
      • Cash
      • Petty Cash
      • ADLF Deposit
      • Accounts Receivable
      • Prepaid Expenses
balance sheet accounts6
Balance Sheet Accounts
  • Liabilities - Normal Credit Balance
      • Accounts Payable
      • Salaries Payable
      • ADLF Loan
      • Deferred Revenue
      • Designated Funds
  • Fund Balance - Debit or Credit Balance
income statement accounts
Income Statement Accounts
  • Revenue
      • Sunday & Holy Day Collections
      • Mission Collections
      • Donations
      • Tuition
      • Fundraising
      • Program & Instructional Fees
      • Interest Income (Checking or ADLF Account)
      • Endowment Income
income statement accounts8
Income Statement Accounts
  • Expenses
      • Salaries
      • Benefits (FICA, Health Insurance, Worker’s Comp, Retirement)
      • Training
      • Assessments
      • Bank Fees
      • ADLF Interest
      • Office Supplies
      • Utilities
      • Program Expenses
      • Property & Facilities
accounting examples petty cash
Accounting Examples - Petty Cash
  • Petty Cash - Balance should be no more than $200 and used to reimburse employees for expenses $25 or less
  • To Set up Petty Cash

Debit Petty Cash (Asset)

Credit Cash (Asset)

  • To Reimburse Petty Cash -Make check out to Custodian of Petty Cash - NOT to Cash

Debit Expenses

Credit Cash (Asset)

accounting examples adlf archdiocesan deposit and loan fund
Accounting Examples - ADLFArchdiocesan Deposit and Loan Fund
  • Deposit to ADLF Accounts

Debit ADLF Savings Account (Asset)

Credit Cash (Asset)

  • Record Interest

Debit ADLF Savings Account (Asset)

Credit Interest Income (Revenue)

  • ADLF Withdrawal

Debit Cash (Asset)

Credit ADLF Savings Account (Asset)

accounting examples adlf archdiocesan deposit and loan fund11
Accounting Examples - ADLFArchdiocesan Deposit and Loan Fund
  • Use ADLF Savings for Building Projects

Debit Building/Construction Expense

Credit ADLF Deposit Account (Asset)

  • Record ADLF Loan

Debit Building/Construction Expense

Credit ADLF Loan Payable (Liability)

  • Record ADLF Loan Payment

Debit Loan Payable (Liability)

Debit ADLF Interest Expense

Credit Cash (Asset)

accounting examples recording tuition revenue
Accounting ExamplesRecording Tuition Revenue
  • Tuition revenue must be divided into four different categories for reporting purposes:
    • Catholic - Parishioner
    • Catholic - Non-Parishioner
    • Non-Catholic
    • Other Instructional Fees
  • Debit Cash (Asset)

Credit Tuition Revenue

  • All Daycare revenue for parishes with no schools and Religious Education record to Other Program & Instructional Revenue
accounting examples recording payroll
Accounting ExamplesRecording Payroll
  • Record from Semi-Monthly Payroll Summaries

Debit Salaries Expense

Debit FICA Expense

Debit Service Fee Expense

Credit Cash (Asset)

  • Record Salaries in appropriate department - School, Faith Formation, Parish Life, etc.
accounting examples accruals
Accounting ExamplesAccruals
  • Parishes generally use cash basis - when cash is received or disbursed, a transaction affects the general ledger
  • When significant work is done before end of fiscal year is closed and not paid for until the following year, need to accrue as follows

Debit Expense

Credit Accounts Payable (Liability)

  • When vendor is paid

Debit Accounts Payable (Liability)

Credit Cash (Asset)

accounting examples endowment distributions
Accounting ExamplesEndowment Distributions
  • Endowments should not be recorded as asset and do not record realized or unrealized gain (loss).
  • Distributions are sent via direct deposit quarterly, semi-annually, or annually.
  • Only record endowment distribution

Debit Cash (Asset)

Credit Endowment Revenue

income statement example

Sunday & Holy Day Contributions




Contributions Revenue

Other Program & Instructional Rev

Interest Income

Total Revenue









Income Statement Example
income statement example17

Salaries Expense

FICA Expense

Health Insurance

Property Insurance


Worker’s Compensation


Total Expenses

Revenue less Expenses

$116,100 - $37,425= $78,675 = Change in Fund Balance from Prior Year to Current Year









Income Statement Example
balance sheet example

Cash 61,475

Petty Cash 200

ADLF Deposit 22,000


Total Assets: $83,675


ADLF Loan 5,000

Accrued Payroll 1,250

Total Liabilities 6,250

Fund Balance:

Beg. Balance 5,000

Net Income 78,675

Ending Balance 83,675

Total Liabilities + Fund Balance:$83,675

Balance Sheet Example
nonprofit organizations federal tax exempt
Nonprofit OrganizationsFederal Tax Exempt
  • 501(c)(3) Group Ruling states that all Catholic organizations listed in the Official Catholic Directory are federally tax exempt.
  • Provide this letter ( as support that your parish, school, or agency is federally tax exempt.
nonprofit organizations sales tax exemption
Nonprofit OrganizationsSales Tax Exemption
  • ST-105 - Sales Tax ExemptionCertificate

For blanket or single purchases

  • To qualify for sales tax exemption, purchase must be used for the same purpose that the organization is being exempt
  • Meals, lodging, airfare, and purchases for social purposes are never exempt
nonprofit organizations sales tax exemption utilities
Nonprofit OrganizationsSales Tax Exemption - Utilities
  • For utilities (telephone, electric, gas, water) complete Form ST-200 (for each metered vendor)

  • Mail completed form to Indiana Department of Revenue
  • Indiana Department of Revenue will issue ST-109
  • Submit to utility vendor to receive sales tax exemption
  • Keep copy of ST-109 on file
nonprofit organizations sales tax exemption22
Nonprofit OrganizationsSales Tax Exemption
  • Form NP-20 - Indiana Nonprofit Organization’s Annual Report
  • Organizations must report annually to maintain sales tax exemption
  • Due by November 15th (15th day of the 5th month following the end of the fiscal year)
charitable contributions
Charitable Contributions
  • Archdiocese recommends providing contribution statements to parishioners at least annually even to those who give nothing
  • IRS requires a written acknowledgement for one-time contributions of $250 or more
  • If checks are made out to the Mission Office or special collection directly, the receivingorganization provides the written acknowledgement. The parish is responsible for the acknowledgement of all checks made out to the parish.
charitable contributions24
Charitable Contributions
  • If an individual receives a benefit from the contribution, this must be deducted from the acknowledgement letter. (Example: $100 ticket from fundraising dinner, $25 is the fair market value of dinner, charitable contribution is $75)
  • Contributions NOT deductible:
    • Value of time or services
    • Contributions from which you benefit
    • Contributions made to a specific individual
    • Payments to a member of the clergy to spend as he wishes, such as for personal expenses
    • Expenses paid for another person to provide services to a qualified organization
annual irs tax forms
Annual IRS Tax Forms
  • Must provide 1099-MISC to report payments of $600 or more in a calendar year to unincorporated individuals not treated as employees or an entity for services performed
  • 1099-MISC postmarked by January 31st
  • Copy A to IRS by February 28th
internal controls
Internal Controls
  • Parish Internal Control Assessments (PICA)
    • Performed by independent CPA firms
    • Once every three years
    • Cover critical areas identified in our internal control policy
  • Internal Control Policy