Fund Accounting
Fund Accounting is a specialized accounting system used primarily by non-profit organizations, government entities, and other organizations that need to track resources allocated for specific purposes. This method focuses on accountability rather than profitability, ensuring that funds are used according to their designated purposes.
In Fund Accounting, each fund is treated as a separate entity, with its own set of financial statements. This allows organizations to monitor the inflow and outflow of resources, ensuring compliance with regulations and donor restrictions. By maintaining distinct accounts for each fund, organizations can provide transparency and demonstrate responsible financial management.