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Lesson 3: Accounting: The Language of Budgeting
Revenue Accounts
There are two dimensions for revenue accounts:
- Fund
- To record the revenues in the correct set of accounts
- Source
- To identify where the revenues come from
There are four primary sources used for revenue accounts:
- 6000
- Local Revenue
- 7000
- State Revenue
- 8000
- Federal Revenue
- 9000
- Other Revenue
Each of the main sources has a variety of subsources that specify in greater detail the specific account subcodes, titles, and definitions of the account.
Each revenue account has a code number assigned to it in the Chart of Accounts. This allows it to be individually identified and properly recorded.
For a full listing, see Chart of Accounts, Section I.
All local sources of revenue have a 6000 account code
- 6111
- Current Real Estate Taxes
- 6400
- Delinquent Taxes
- 6500
- Earning on Investments
All state sources of revenue have a 7000 account code.
- 7110
- Basic Education Funding
- 7271
- Special Education Funding for School Aged Pupils
All federal sources of revenue have an 8000 account code.
- 8512
- IDEA, Part B
- 8521
- Vocational Education — Operating Expenditures
All other financing sources of revenue have a 9000 account code.
- 9100
- Sale of Bonds
- 9310
- General Fund Transfers (from the General Fund)
Summary
For revenue accounts, there are two different dimensions. Revenues are treated and accounted for by first funds. We've already talked about the fund. That's which set of accounts that's the transactions are going to be recorded in. Mostly they'll be the general fund, but there may be cases where there will be other funds that are to be used.
And the most important dimension for revenues is the source. This identifies where the revenues come from. Who provided the revenues to the school district? And there are four types of sources, four general types of sources-- local, state, federal, and other. Each of those has its own accounting code or grouping. The 6,000 accounts for revenues are local revenue, 7,000, state, and so forth.
Now, each of these main sources, like local revenues, has a whole bunch of sub-sources that break the general one down into particular types of, in this case, local revenues. And each of these types of local revenues has its own account code assigned to it so that you can recognize that and identify it and keep track of it. These are all again specified in the manual of accounting. And you can see the full listing of the revenues in the Chart of Accounts Section I. It's toward the end.
And in the revenue codes, often you will find revenues sub-sub-sub-accounts, meaning you go down to the fourth digit. And one of the most important revenue accounts for school districts is one that does do that. It's the current real estate taxes, where districts get the bulk of their income from local sources. And it's a local source, so it starts with an account code 6,000. And you can track it and the accounting manual. But the actual code for that is 6111, meaning it's current real estate taxes.
State sources have the 7,000 code. Again, the important ones there you'll find in the Accounting Manual. But one in particular-- the basic education funding. This is where the bulk of the state aid to districts comes from, and its accounted under Code 7120. And you can follow the rest of the codes, as well.