Account Overview (COA)

The Account is the next segment in the Chart of Accounts. It describes the purpose of an expenditure, the type of revenues received, and the balance sheet accounts required for GAAP accounting. Eleven positions of the account are currently being used for the North Carolina Accounting System. The North Carolina Accounting System account is identified as follows:

Account is divided into five identifiers:

• Account Type (Position 1)
• Account Subtype (Position 2)
• Statewide Object (Positions 3-6)
• Subaccount (Positions 7-9) (Optional)
• Fiscal Year (Grant Accounting Only) (Positions 10-11)

The first nine positions represent the North Carolina Accounting System account numbers. Positions 10 and 11 are reserved for a grant fiscal year indicator (where year 1991 becomes 91). For non-grant accounting functions, positions 10 and 11 are blank. The last seven positions are also left blank. They are reserved for future use of further detail and are not currently required.

Account Type

The first position of the Account is the account type, which describes the major category of an account. Through the use of the different account types, the general ledger provides both budgetary and accrual GAAP reporting. The processing class is built within the software to indicate the accounting treatment of account types at year- end. The following is a list of account types with their normal balance and processing class, which are valid for Account position 1:

Data Entry Account Types

For data entry purposes, only account types beginning with 1 through 5 are used. System accounting rules in the Financial Controller (FC) module change an account type from its original entry type to its posted account type.

The following description explains this concept:

Life Cycle of an Expenditure

"Account type 7" (Budgeted Expenditure), "Account type 8" (PO Encumbrance), "Account type 0" (AP Encumbrance) and "Account type 5" (Actual Expenditure) represent the stages of an expenditure or expense in North Carolina Accounting System.

• Budgeted Expenditure (Account Type 7)
  To establish a budget for an expenditure, an "Account type 5" is entered into the North Carolina Accounting System through the Budgetary Control module. A system accounting rule programmatically changes the "Account type 5" entered to an "Account type 7" representing a budgeted expenditure. Only the "Account type 7" transaction is recorded in the General Ledger.
• Purchase Order Encumbrance (Account Type 8)
  To establish an encumbrance, an "Account type 5" is entered in the purchasing module. When the Purchase Order is established, the "Account type 5" is programmatically converted to an "Account type 8" (purchase order encumbrance) by a system accounting rule. Only the "Account type 8" transaction is recorded in the General Ledger.  
• Accounts Payable Encumbrance (Account Type 0)
  When the invoice is entered or displayed in the accounts payable module, an "Account type 5" is associated with the transaction amount. If a purchase order has been previously entered for this invoice, an accounting rule liquidates the "Account type 8" purchase order encumbrance and records an "Account type 0" (AP encumbrance). Account types "8" and "0" transactions are recorded in the General Ledger.
• Actual Expenditure (Account Type 5)
  When the check is produced, the "Account type 0" (AP encumbrance) is liquidated and the actual expenditure, "Account type 5" is recorded. Account types "0" and "5" transactions are recorded in the General Ledger.
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Thus Account types 7 , 8, 0, and 5 are the progression of an expenditure from the budget, to the purchase order stage, to a payable encumbrance and finally to an actual expenditure.

Account Subtype

Account subtype indicates financial and budgetary reporting requirements. The following is a list of account subtypes which are valid for each account type: