| VOLUME: I |
POLICIES RELATED TO ACCOUNTING ADMINISTRATION |
| SUBJECT: |
Accrual Accounting |
| SOURCE: |
AICPA Audit Guidelines , Generally Accepted Accounting Principles, Chief Accountant |
| DATE ISSUED: |
July, 1996 |
| POLICY NO.: |
I-350 |
| RATIONALE: |
To comply with AICPA Audit Guidelines 2.09. |
| POLICY: |
All University operations should be maintained and compliance reports prepared on the accrual basis of accounting at the end of the fiscal year. Revenues should be reported when earned and expenditures reported when materials or services are received or used.
|
| DEFINITIONS: |
Accrual Accounting is the matching of revenue and expense. The revenue/expense should be recorded in the period that the event happened. The revenue and expense that are correlated to each other should be recorded in the same period. If there is not any revenue generated by the expense then the expense should be recorded when it occurs not when the cash is paid.
|
| PROCEDURE REFERENCE: |
Indiana University is currently recording most transactions on an accrual basis. This policy is intended to clarify which method of accounting is required by the AICPA Audit Guide. Financial Management Support coordinates the year end journal entries, including accruals, for the University on non-auxiliary accounts.
The auxiliary document can be used to record entries that do not affect cash. This document is located in the IUFIS transaction processing system.
|
| CROSS REFERENCE: |
See Accounting Administration Policy I-380, Historical Data Only in the Official Accounting Records.
|
| RESPONSIBLE ORGANIZATION: |
Financial Management Support |
