Nonprofit Bookkeeping & Accounting For Dummies, 2nd Edition

Chapter 1

Introducing Nonprofit Bookkeeping and Accounting

IN THIS CHAPTER

Getting an overview of bookkeeping and accounting

Performing a balancing act with your books

Hitting up Uncle Sam for some free money

Paying payroll taxes to the IRS

Closing the year with financial statements

Your accounting period indicates the beginning and end of your reporting period. This period can be usually 6, 12, or 18 months depending on your company’s needs. Let’s assume you chose the most common reporting period of 12 months; this period can be a calendar year ending from January to December or a fiscal year ending using another 12-month period. If you use the calendar year, the first transaction on January 1 starts your accounting cycle, and your last transaction on December 31 ends the cycle. You compile your financial statements after the cycle ends, perhaps get your financial statements audited, and start the cycle all over again.

Being a good steward for your nonprofit requires that your books ...