2.2.

2 Revenue and Gains Classification

Unlike for-profit educational entities which exist for the purpose of making profits for the

owners and shareholders, the non-profit educational institutions cannot distribute revenues to its

owners and members, and so they rely heavily on charitable contributions, funds, memberships

and service fees to fund for their activities in line with their goals. Non-profit revenue is the

amount of cash generated by an organization – either through contributions, memberships,

fundraising events, and fees – that are considered primary to its operation. Non-profit revenue is

reflected in its Statement of Activities, the equivalent of a for-profit's income statement, and its

Statement of Financial Position. Revenue in educational institutions refers to all sources of funds

that support the institution itslef. It must be accounted for the funds to which it relates. For

reporting purposes in accounting for non-profit educational institutions, all revenues both general

and restricted should be classified as to the following:

Educational and General Revenues

This is the primary fund used by an educational institution. It is used to support the main

activities implemented by the institution as well as the the administrative and operational work of

the institution. It comprises of tution fees which are charges to students for enrollment, students

fees which are charges paid by the students other than tuition, appropriated funds coming from

governmental organization to support the goal of educational institutions, income from

investment of the endowment, sales and services in relation to educational departments, gifts and

grants given by the government or private organization to support general operation of the

institution and its specified activities, and other applicable sources of revenue.

Auxiliary Enterprises Revenues

 This are revenue generated from providing goods and services to students, faculty, and

others that is not directly related to the main services of an educational institution. This includes

sales from the bookstore and food services and income from dormitories, parking fees, health

services, special events, and many more.

Expired Term Endowment Revenues

This represents dollar amounts of term endowments on which the restriction has lapsed,

freeing them to become unrestricted resources. If upon expiration of the endowment restriction,

the gift is still restricted, it would not be reclassified until money was spent for that purpose.

Student Aid

This are revenue given by other parties to provide financial assistance to the students who

wants to widen their knowledge and expertise in the institution. Normally, there should be a

rendering of services in order to be provided with a student aid.

https://education.stateuniversity.com/pages/1728/Accounting-Systems-in-Higher-Education.html

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