Account

The Account is about What

Required = Yes, for all transactions

On operating reports of revenues and expenses, the Account segment of the FOAPAL represents what the money originated as (e.g., tuition, appropriation, fees) or what the money is being spent on (salaries, supplies, travel).  On the balance sheet, the Account segment identifies what the asset is made up of (e.g., cash, equipment, land) or what the obligation is for (e.g., trade accounts payable, accrued interest, debt).  Accounts are organized into the following Account Types:

  • Assets
  • Liabilities
  • Control
  • Fund Balance (Net Assets)
  • Revenue
  • Expenses
  • Fun Additions and Deductions

Accounts also have a hierarchy to facilitate grouping like accounts into summarized information for reporting (e.g., salaries, fringe, contract services, travel).

An Account can be established when there is a University-wide need to track or establish rules for a particular type of transaction that cannot be identified by other attributes of the transaction. For example, if there is a reporting requirement to track foreign travel separate from domestic travel, this would necessitate a separate Account being created.  Similar requirements exist for grant expenses that have indirect costs applied versus those that do not. However, tracking Central Office Supplies versus Academic Supplies would not require separate accounts, as that information could be determined by other segments of the chart.

Cardinal Accounts: Mason is required to report financial information to Cardinal, the Commonwealth’s accounting system.  Attributes are attached to accounts to provide mapping to Cardinal’s COA.  Mason’s account structure is based on our internal reporting needs.  In some cases, we have multiple accounts mapped to a single Cardinal account.   In other cases, separate accounts have been created to track the separation for Cardinal.  Not every account in the Cardinal COA will exist in Mason’s COA.  Mason will only create individual accounts in our Chart to accommodate Cardinal account reporting for recurring and material business activities of the university.
Recharge and Recovery: Recharge accounts and Recharge recovery accounts are used for internal charges between Mason units due to use of specialized systems or services.  Receipts from or payments to external parties should not flow through these accounts.  These accounts are used for internal billing and budgeting purposes only and the activity is eliminated for external financial reporting.
Reimbursements: Reimbursements for an expense we have incurred on behalf of someone else, (i.e., unrelated to Mason activities/services) should be credited to the expense or receivable account originally charged.  Separate accounts are not generally needed to track reimbursements.
Revenue: Revenue accounts should be credited if we are generating an invoice to an external party for goods or services provided, which may include related direct expenses.
Account Hierarchy:
  • Level 1 (L1) and Level 2 (L2) of the Account Hierarchy are the Account Types. 

  • Level 3 (The first level of the Account Hierarchy) will map to the Board of Visitors groupings for reporting.
  • Level 4 represents another grouping under the Board of Visitors’ major categories to provide more granular detail, but still summarized from the transactional account level.
  • Level 5 is the data entry (transactional) level for all accounts.
Clearing Accounts:
  • Clearing accounts are groups of accounts that are characterized by temporary holding debit or credit balances to be offset by other external transactions or that are to be transferred elsewhere in the general ledger. For example, scholarships are entered as financial aid to student accounts covered by checks from outside of GMU organizations.  To improve internal controls and monitoring of Clearing Accounts, principles have been established for consistent creation, placement, and reconciliation of all Clearing Accounts.
  • Clearing activity resides in a single fund with a separate balance sheet account for each clearing activity stream.  A relevant volume of transactions might justify creating a separate account to facilitate reconciliation (ex.: Outside scholarships X Foundation scholarships). However, in general, similar activities should be combined together in a single account (wire transfers and Flywire transfers).
  • To identify the group of clearing accounts, a separate L4 level designates the accounts under it as clearing.  For example, under the L3 Accounts Payable, there is an L4 that is Current Liabilities, Clearing and all liability clearing accounts are at the L5 level.
Budget reporting for Sponsored Project Funds:
  • Research reporting will rely on the Budget Pool assignment on L5 accounts to group accounts (rather than the hierarchy).  In order for the budget and expenses to align, non-capital goods should be loaded into the supplies categories, not the “Furniture and Equipment less than 5000) Categories.