Chapter 6: Account Classification Descriptions
Description
Assets
101
Cash in Bank. All funds on deposit with a bank or savings
and loan institution, normally in non-interest-bearing accounts.
Interest-bearing accounts are recorded in investments.
102
Cash on Hand. Currency, coins, checks, postal and express
money orders, and bankers’ drafts on hand.
103
Petty Cash. A sum of money set aside to pay small obligations
for which the issuance of a formal voucher and check would be
too expensive and time-consuming.
104
Change Cash. A sum of money set aside to provide change.
105
Cash With Fiscal Agents. Deposits with fiscal agents,
such as commercial banks, for paying matured bonds and interest.
111
Investments. Securities and real estate held for producing
income in the form of interest, dividends, rentals, or lease
payments. Investments should be presented at fair value as of
the reporting date. Gains and losses from changes in the fair
value of investments are recorded using revenue account 1530.
The account does not include capital assets used in school district
operations. Separate accounts for each category of investments
may be maintained.
112
Unamortized Premiums on Investments. The excess of
the amount paid for securities over the face value that has
not yet been amortized. Use of this account is restricted to
short-term money market investments.
113
Unamortized Discounts on Investments (Credit). The
excess of the face value of securities over the amount paid
for them that has not yet been written off. Use of this account
is restricted to short-term investments.
114
Interest Receivable on Investments. The amount of interest
receivable on investments, excluding interest purchased. Interest
purchased should be shown in a separate account.
115
Accrued Interest on Investments Purchased. Interest
accrued on investments between the last interest payment date
and the date of purchase. The account is carried as an asset
until the first interest payment date after the date of purchase.
121
Taxes Receivable. The uncollected portion of taxes
that a school district or government unit has levied and that
has become due, including any interest or penalties that may
be accrued. Separate accounts may be maintained on the basis
of tax roll year, current and delinquent taxes, or both.
122
Allowance for Uncollectible Taxes (Credit). The portion
of taxes receivable estimated not to be collected. The account
is shown on the balance sheet as a deduction from the Taxes
Receivable account to arrive at the net taxes receivable. Separate
accounts may be maintained on the basis of tax roll year, delinquent
taxes, or both.
131
Interfund Loans Receivable. An asset account used to
record a loan by one fund to another fund in the same governmental
unit. It is recommended that separate accounts be maintained
for each interfund receivable loan.
132
Interfund Accounts Receivable. An asset account used
to indicate amounts owed to a particular fund by another fund
in the same school district for goods sold or services rendered.
It is recommended that separate accounts be maintained for each
interfund receivable.
141
Intergovernmental Accounts Receivable. Amounts due
to the reporting governmental unit from another governmental
unit. These amounts may represent grants-in-aid, shared taxes,
taxes collected for the reporting unit by another unit, loans,
and charges for services rendered by the reporting unit for
another government. It is recommended that separate accounts
be maintained for each interagency receivable.
151
Loans Receivable. Amounts that have been loaned to
persons or organizations, including notes taken as security
for such loans, where permitted by statutory authority.
152
Allowance for Uncollectible Loans (Credit). The portion
of loans receivable estimated not to be collected. The account
is shown on the balance sheet as a deduction from the Other
Loans Receivable account.
153
Other Accounts Receivable. Amounts owing on open account
from private persons, firms, or corporations for goods and services
furnished by a school district (but not including amounts due
from other funds or from other governmental units).
154
Allowance for Uncollectible Accounts Receivable (Credit).
A provision for that portion of accounts receivable that
is estimated will not be collected. The account is shown on
the balance sheet as a deduction from the Other Accounts Receivable
account.
171
Inventories for Consumption. The cost of supplies and
equipment on hand not yet distributed to requisitioning units.
172
Inventories for Resale. The value of goods held by
a school district for resale rather than for use in its own
operations.
181
Prepaid Items. Expenditure/expenses paid for benefits
not yet received. Prepaid expenses differ from deferred charges
in that they are spread over a shorter period of time than deferred
charges and are regularly recurring costs of operation. Examples
of prepaid expenses are prepaid rent, prepaid interest, and
unexpired insurance premiums.
191
Deposits. Funds deposited by the school district as
prerequisite to receiving services, goods, or both.
192
Deferred Expenditures/Expenses. Certain disbursements
that are made in one period but are more accurately reflected
as an expenditure/expense in the next fiscal period.
193
Capitalized Bond and Other Debt Issuance Costs. Represents
certain bond and other debt issuance costs, including lease-purchase
debt issuance costs, that are capitalized for the purpose of
accounting for the cost/valuation basis of capital assets.
194
Premium and Discount on Issuance of Bonds. Represents
amounts to be amortized as debt premium/discount in connection
with the issuance of bonds.
199
Other Current Assets. Current assets not provided for
elsewhere.
200
Capital Assets. Those assets that the school district
intends to hold or continue in use over a long period of time.
Specifically, capital assets include land, improvements to land,
easements, buildings and building improvements, vehicles, machinery,
equipment, works of art and historical treasures, infrastructure,
and all other tangible or intangible assets that are used in
operations and that have initial useful lives that extend beyond
a single reporting period.
211
Land and Land Improvements. A capital asset account
that reflects the acquisition value of land owned by a school
district. If land is purchased, this account includes the
purchase price and costs such as legal fees, filling and excavation
costs, and other associated improvement costs incurred to
put the land in condition for its intended use. If land is
acquired by gift, the account reflects its fair value at the
time of acquisition. Further, permanent improvements to land,
such as grading and fill, should be accounted for in this
account.
Land and land improvements are considered nonexhaustible
assets owing to their significantly long expected useful life.
Nonexhaustible assets are not to be depreciated. Therefore,
all assets classified by asset code 211 will not result in
a depreciation expense.
221
Site Improvements. A capital asset account that
reflects the value of non-permanent improvements to building
sites, other than buildings, that add value to land. Examples
of such improvements are fences, retaining walls, sidewalks,
pavements, gutters, tunnels, and bridges. If the improvements
are purchased or constructed, this account contains the purchase
or contract price. If improvements are obtained by gift, it
reflects the fair value at the time of acquisition.
Site improvements are improvements that have a limited useful
life. Because these improvements decrease in their value/usefulness
over time, it is appropriate to depreciate these assets. Therefore,
all capitalized site improvements should be depreciated over
their expected useful life.
222
Accumulated Depreciation on Site Improvements. Accumulated
amounts for the depreciation of land improvements.
231
Buildings and Building Improvements. A capital asset
account that reflects the acquisition value of permanent structures
used to house persons and property owned by the school district.
If buildings are purchased or constructed, this account includes
the purchase or contract price of all permanent buildings and
the fixtures attached to and forming a permanent part of such
buildings. This account includes all building improvements,
including upgrades made to building wiring for technology. If
buildings are acquired by gift, the account reflects their fair
value at the time of acquisition.
232
Accumulated Depreciation on Buildings and Building Improvements.
Accumulated amounts for the depreciation of buildings and
building improvements.
241
Machinery and Equipment. Tangible property of a more
or less permanent nature, other than land, buildings, or improvements
thereto, that is useful in carrying on operations. Examples
are machinery, tools, trucks, cars, buses, computers, purchased
software, furniture, and furnishings. Appendix E provides criteria
to distinguish whether a purchase is a supply or a piece of
machinery or equipment.
242
Accumulated Depreciation on Machinery and Equipment. Accumulated
amounts for the depreciation of machinery and equipment.
251
Works of Art and Historical Treasures. Individual items
or collections of items that are of artistic or cultural importance.
252
Accumulated Depreciation on Works of Art and Historical
Collections. Accumulated amounts for the depreciation (as
applicable) of works of art and historical treasures.
261
Infrastructure. A capital asset, network, or subsystem
that has a useful life that is significantly longer than those
of other capital assets. These assets may include water/sewer
systems, roads, bridges, tunnels, and other similar assets.
262
Accumulated Depreciation on Infrastructure. Accumulated
amounts for the depreciation of infrastructure assets.
271
Construction in Progress. The cost of construction
work undertaken but not yet completed.
Liabilities
Code
Description
401
Interfund Loans Payable. A liability account used to
record a debt owed by one fund to another fund in the same governmental
unit. It is recommended that separate accounts be maintained
for each interfund loan.
402
Interfund Accounts Payable. A liability account used
to indicate amounts owed by a particular fund and services rendered.
It is recommended that separate accounts be maintained for each
interfund payable.
411
Intergovernmental Accounts Payable. Amounts owed by
the reporting school district to another governmental unit.
It is recommended that separate accounts be maintained for each
interagency payable.
421
Accounts Payable. Liabilities on open account owing
to private persons, firms, or corporations for goods and services
received by a school district (but not including amounts due
to other funds of the same school district or to other governmental
units).
422
Judgments Payable. Amounts due to be paid by a school
district as the result of court decisions, including condemnation
awards paid for private property taken for public use.
423
Warrants Payable. Amounts due to designated payees
in the form of a written order drawn by the school district
directing the school district treasurer to pay a specific amount.
431
Contracts Payable. Amounts due on contracts for assets,
goods, and services received by a school district.
432
Construction Contracts Payable-Retainage. Liabilities
on account of construction contracts for that portion of the
work that has been completed but on which part of the liability
has not been paid pending final inspection, or the lapse of
a specified time period, or both. The unpaid amount is usually
a stated percentage of the contract price.
433
Construction Contracts Payable. Amounts due by a school
district on contracts for constructing buildings and other structures
and other improvements.
441
Matured Bonds Payable. Bonds that have reached or passed
their maturity date but that remain unpaid.
442
Bonds Payable-Current. Bonds that have not reached
or passed their maturity date but are due within one year or
less. This account is used only in Proprietary or Fiduciary
funds.
443
Unamortized Premiums on Issuance of Bonds. An account
that represents that portion of the excess of bond proceeds
over par value and that remains to be amortized over the remaining
life of such bonds.
451
Loans Payable. Short-term obligations representing
amounts borrowed for short periods of time, usually evidenced
by notes payable or warrants payable.
452
Lease Obligations-Current. Capital lease obligations
that are due within one year.
455
Interest Payable. Interest due within one year.
461
Accrued Salaries and Benefits. Salary and fringe benefit
costs incurred during the current accounting period that are
not payable until a subsequent accounting period.
471
Payroll Deductions and Withholdings. Amounts deducted
from employees’ salaries for withholding taxes and other purposes.
District-paid benefits amounts payable also are included. A
separate liability account may be used for each type of benefit.
472
Compensated Absences-Current. Compensated absences
that will be paid within one year.
473
Accrued Annual Requirement Contribution Liability. A
liability arising from payments not made to pension funds. This
amount represents any difference between the actuarially determined
annual required contribution and actual payments made to the
pension fund.
481
Deferred Revenues. A liability account that represents
revenues collected before they become due.
491
Deposits Payable. Liability for deposits received as
a prerequisite to providing or receiving services, goods, or
both.
499
Other Current Liabilities. Other current liabilities
not provided for elsewhere.
Long Term Liabilities. Obligations with a maturity
of more than one year. These accounts should be used only with
Proprietary and Fiduciary funds.
511
Bonds Payable. Bonds that have not reached or passed
their maturity date and that are not due within one year.
512
Accreted Interest. An account that represents interest
that is accrued on deep discount bonds. This account should
be used by school districts that issue capital appreciation
bonds. Such bonds are usually issued at a deep discount from
the face value, and no interest payment is made until maturity.
Under full accrual accounting, the district is required to accrete
the interest on the bonds over the life of the bonds. Accretion
is the process of systematically increasing the carrying amount
of the bond to its estimated value at the maturity date of the
bond. To calculate accreted interest, the district should impute
the effective interest rate, using the present value, the face
value (or the future value), and the period of the bond, and
multiply the effective interest rate by the book value of the
debt at the end of the period. Accreted interest is usually
recorded as an addition to the outstanding debt liability.
513
Unamortized Gains/Losses on Debt Refundings. An
account that represents the difference between the reacquisition
price and the net carrying amount of old debt when a current
or advance refunding of debt occurs. This account should be
used only when defeasance of debt occurs for Proprietary funds.
The unamortized loss amount should be deferred and amortized
as a component of interest expense in a systematic and rational
manner over the remaining life of the old debt or the life
of the new debt, whichever is shorter. On the balance sheet,
this deferred amount should be reported as a deduction from
or an addition to the new debt liability.
521
Loans Payable. An unconditional written promise signed
by the maker to pay a certain sum of money one year or more
after the issuance date.
531
Capital Lease Obligations. Amounts remaining to be
paid on capital lease agreements.
551
Compensated Absences. Amounts remaining beyond the
period of one year to be paid on compensated absences balances.
561
Arbitrage Rebate Liability. Liabilities arising from
arbitrage rebates to the IRS from bond financing.
590
Other Long-Term Liabilities. Other long-term liabilities
not provided for elsewhere. This account represents amounts
due after more than one year from the balance sheet date for
advances from other funds and certain miscellaneous liabilities,
including workers’ compensation, self-funded insurance, and
legal claims and judgments.
Fund
Balances/Fund Net Asset
Code
Description
711
Reserve for Inventories. A reserve representing that
portion of a fund balance segregated to indicate that assets
equal to the amount of the reserve are invested in inventories
and are, therefore, not available for appropriation. The use
of this account is optional unless the purchases method of accounting
for inventory is used.
712
Reserve for Prepaid Items. A reserve representing that
portion of a fund balance segregated to indicate that assets
equal to the amount of the reserve are tied up and are, therefore,
not available for appropriation. The use of this account is
optional.
713
Reserve for Encumbrances. A reserve representing that
portion of a fund balance segregated to provide for unliquidated
encumbrances. Separate accounts may be maintained for current
encumbrances and prior-year encumbrances.
714
Other Reserved Fund Balance. A reserve representing
that portion of a fund balance segregated to indicate that assets
equal to the amount of the reserve are obligated and are, therefore,
not available for appropriation. It is recommended that a separate
reserve be established for each special purpose. One example
of a special purpose are restricted Federal programs.
720
Designated Fund Balance. A designation representing
that portion of a fund balance segregated to indicate that assets
equal to the amount of the designation have been earmarked by
the governing board or senior management for a bona fide purpose
in the future.
730
Unreserved Fund Balance. The excess of the assets of
a fund over its liabilities, fund reserves, and designations.
740
Invested in Capital Assets, Net of Related Debt. This
account is used to record the net asset component invested in
capital assets, net of related debt, which represents total
capital assets less accumulated depreciation less debt directly
related to capital assets. This account is to be used in
Proprietary funds only.
750
Restricted Net Assets. This account is used to record
the net assets component-restricted net assets-which represents
net assets restricted by sources internal or external to the
organization. This account is to be used in Proprietary funds
only.
760
Unrestricted Net Assets. This account is used to record
the net asset component-unrestricted net assets-which represents
net assets not classified in accounts 740 and 750. This account
is to be used in Proprietary funds only.
