Accounting

Reserves are like savings accounts – an accumulation of funds for a future purpose. The source of funding for a reserve might be surpluses from operations, or scheduled transfers that have been planned and budgeted. Similar to savings accounts, expenditures should not be made directly from reserve accounts; the only activity should be transfers in or out of the account (see Funding and Using Reserves).

Wrong Natural Balance

Annually, Accounting will distribute a list of accounts for asset and liability object codes for balance that does not have the natural classification. The natural classification for assets is a debit balance, for liabilities it is a credit balance, therefore, the wrong natural balance for assets (with the exception of a contra asset) is a credit balance and for liabilities it is a debit balance.

These pages contain guidelines for reconciling asset and liability object codes and monitoring revenue and expense activity. 

Why reconcile asset and liability object codes and monitor operating balances (revenue and expense) object codes?

Restriction Classifications

Restriction classification is an accounting attribute. Only funds given by an outside entity (i.e., gifts or income from endowments) may be recorded in a restricted account. All other types of income are classified as unrestricted on the university's financial statements.

The attribute in the Kuali Financial System (KFS) that represents the restriction classification is the Account Restricted Status Code.

Recording Gift Revenue

Gifts are recorded by the following:

• Alumni Affairs and Development (Advancement Services)
• Office of Trust and Estates
• Certain units (e.g., Laboratory of Ornithology)

Gifts-in-kind are evaluated on an individual basis and must be coordinated with Advancement Services.

Moving gifts in the general ledger normally is done by Advancement Services. This is important for fundraising purposes to make sure the individual gift record is reflected properly in the university contributor relations system.