ASSETS – Something that is owned, that has value. Examples: Cash, Accounts Receivable, Inventory
BUDGET – An amount of funds that is established for a specific purpose for a specific period of time. Actual expenses for the period are compared to the budgeted amount in order to determine what remains to be spent. That amount is referred to “Budget Balance Available”.
CREDITS – The right side of the accounting equation. Liabilities are credit accounts. Credits make them bigger. (Debits make them smaller)
DEBITS – The left side of the accounting equation. Assets are debit accounts. Debits make them bigger. (Credits make them smaller)
EQUATION -The Accounting Equation dictates that the total amount of debits must equal the total amount of credits
FISCAL YEAR –From July 1 through June 30. An Operating Budget is established for this period of time for University Units.
GENERAL LEDGER – The complete record of all of the financial transactions which have been authorized and processed on behalf of the University. The General Ledger is considered the official record.
INVOICE – A business’ request for payment due to providing goods or services.
JOURNAL ENTRY – The financial mechanism to transfer recorded activity either between or within units.
LIABILTIES – Claims against your assets, something that has to be repaid to someone else. Examples: Accounts Payable, Debt, Deferred Revenues.
MATERIAL – Material is the concept of financial importance. An activity is considered material, if it has a financial impact on a unit. The opposite term is Immaterial.
NET – The result of business activity – In other words, the total revenues of a financial unit minus the total expenses of a financial unit.
OVERHEAD EXPENSES – charged to Projects based upon their on campus presence. Overhead is charged as a percent of budgeted funds rather than as a calculation of actual usage. Overhead typically includes utilities, maintenance and administration.
PROJECT – An endeavor that has a specific budget for a specific budget for a specific period of time that may be carried over through multiple fiscal years. Frequently, the budgeted funds are provided by a sponsor outside of the University.
RATES – An amount that is charged by a Service Unit for each unit of its expertise. These rates are based upon a regularly reviewed methodology by the Cost Accountant. https://financialservices.umbc.edu/cost-accounting-analysis/
STATEMENT – An audited financial record that is produced at regular intervals to be used for both current and comparison analysis. Management relies on these for information gathering and planning purposes.
TRIAL BALANCE – A financial presentation of the General Ledger, summarized by Account, for a specifically designated period of time. Trial Balances, at the end of a fiscal year, are used for the preparation of the Audited Financial Statements of the University.
UNIT – A subset of the University that has Management responsibility over their Budgeted accounts. For example, a department, a school, or a division.