What is Fund Accounting
Updated: Jun 10, 2020
Fund Accounting , often referred to as restricted account, or designated funds, is the accounting method that Nonprofit Organizations must use when recording donations. In general there are two types of donations , those that are restricted by the donor and unrestricted. Restricted funds simply put means, that funds donated for a specific reason can not be used for anything other than the reason that it was given. For example money received to purchase a new roof can not be used to pay utilities. The other type of funds are unrestricted, which means that the donor has not specified where the money is to be used, and therefore can be used at the discretion of the organization.