Lesson Plan 7.2 –Not-For-Profit Organizations
Course Title – Accounting II
Lesson Title – Accounting for Partnerships and Not-for-Profit Organizations
Lessons and Activities
Specific Objective – Understand and apply concepts and procedures related
to accounting for not-for-profit organizations.
Performance Objectives:
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Explain the difference between a not-for-profit organization and a profitoriented business;
Prepare a budget for a not-for-profit organization;
Journalize budget transactions for a not-for-profit organization;
Journalize revenues for a not-for-profit organization;
Journalize expenditures, encumbrances, and other transactions for a not-forprofit organization;
Name and explain the purpose of the financial statements commonly
prepared by not-for-profit organizations;
Prepare a statement of activities;
Prepare a statement of financial position;
Define accounting terms related to the lesson.
TEKS: 130.167.c.5:
A – explain the nature of managerial cost accounting such as activities, costs,
and cost drivers
C – identify cost accounting systems such as job order costing, process costing,
activity-based costing, and project costing
E – compute overhead rates
I – explain the use of variance analysis for cost accounting
L – calculate variances
M – conduct variance analysis.
6.A.-B – process preliminary budget detail; prepare budget reports.
TAKS: R1, M9, M10
Preparation
Materials Needed:
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Projection System
Lesson Plan 7.2 – Not-For-Profit Organizations
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
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Glencoe’s Textbook, Chapter 16 and 17, and Demonstration Problems
Accounting software and Spreadsheet Software.
Sponge/Focus Activity:
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Explain that over 20 percent of clerical and accounting workers in the United
States are employed by not-for-profit organizations; therefore, it is important
to learn the accounting procedures for not-for-profit organizations as well.
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Exploring the Real World of Business, in Glencoe’s Textbook
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A possible end of class activity is to give each student a 3 x 5 card and give
them several minutes to answer the following question:
o
“What is the most important item you learned today?” Have them
turn in the 3 x 5 card before they leave class. (You can use this
activity whenever you want feedback on what your students
learned.)
Lesson Content:
See Glencoe’s Textbook, chapters 16 and 17. Here is an outline:
I.
II.
Characteristics of not-for-profit organizations
A. fund accounting
Not-for-profit organizations: Financial reporting
A. Statement of activities
1.
End-of-period reporting for not-for-profit organizations
2.
Preparing a statement of activities
i.
Revenue section
ii.
Expenses section
iii.
Change in net assets section
B. Statement of financial position
1.
Preparing a statement of financial position
i.
General fund statement of financial position
ii.
Property, plant, and equipment fund statement of financial
position
C. Notes to financial statements
1.
Content of notes
Teaching Strategies:
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Look at a chart of accounts for not-for-profit organizations; discuss the
differences in the not-for-profit’s chart of accounts and a corporation’s chart of
accounts.
Show your students the financial statements for not-for-profit organizations;
discuss the differences in the not-for-profit’s financial statements and a
corporation’s financial statements.
Glencoe’s Demonstration Problems.
Lesson Plan 7.2 – Not-For-Profit Organizations
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
Assessment:
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For problems you can use Peachtree Accounting from Glencoe, Glencoe
Accounting Software, Century 21 Accounting Software, or a spreadsheet.
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From Glencoe’s Textbook Problems
o Guided Practice
 17-1 Identifying Sources of Revenue
 17-2 Preparing a General Fund Statement of Financial
Position
 17-3 Analyzing a Source Document
 17-4 Notes on Financial Statements.
o Independent Practice
 17-5 Preparing the Revenue Section of the Statement of
Activities
 17-6 Preparing the Expenditures Section of the Statement of
Activities
 17-7 Preparing the Changes in Net Assets Section of the
Statement of Activities
 17-8 Preparing the General Fund Statement of Financial
Position
 17-9 Preparing a Property, Plant, and Equipment Fund
Statement of Financial Position
 17-10 Preparing Financial Statements for a Not-for-Profit
Organization
o Additional Activities
 Using Key Terms, not-for-profit organization;
 Understanding Accounting Concepts and Procedures #1
 Case Study
 Internet Connection
 Workplace Skills
o Open Notes and textbook Quiz: Study Guide for Chapter
This lesson is also assessed through the Unit Test at the end of the Unit.
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Additional Resources:
Textbooks:
Guerrieri, Donald J., F. Barry Haber, William B. Hoyt, and Robert E. Turner,
Glencoe Accounting Real-World Applications & Connections, Advanced
Course, Fourth Edition, Glencoe McGraw-Hill: New York, New York.
Ross, Kenton E., CPA, Mark W. Lehman, CPA, Claudia Bienias Gilbertson, CPA,
Robert D. Hanson, Century 21 Accounting Advanced, Anniversary Edition,
Thomson South-Western: Mason, OH, 2003.
Takin’ Care of Business, Education Handbook, American Institute of Certified
Public Accountants, 1211 Avenue of the Americas, New York, NY 100368775, www.aicpa.org.
Multimedia:
Lesson Plan 7.2 – Not-For-Profit Organizations
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
Century 21’s Teacher Resource CD
Websites:
http://accounting.swpco.com
Lesson Plan 7.2 – Not-For-Profit Organizations
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II