Fund Accounting

Fund accounting is a specialized accounting system used primarily by non-profit organizations and government entities. It focuses on tracking specific financial resources or funds, ensuring that money is used for designated purposes, such as programs or grants. Each fund is treated as an independent entity with its own budget and financial records. This system promotes accountability, transparency, and compliance with regulations, as it allows organizations to demonstrate how funds are allocated and spent. In essence, fund accounting helps organizations manage their finances effectively, ensuring that resources are directed toward their intended goals.