Policies & Procedures Manual - Elizabeth City State University

400.3.1.3An individual might have any number of different accounts for which he or she isresponsible, as shown in the following example:• A number of accounts for various research activities or a number of accounts fordifferent funding for the-same research activityWhat is important is that each account must be unique in that it covers only one function oractivity, has only one person responsible for it, and gets its funding from primarily onesource.2. All the accounts within the FRS are contained in either the General Ledger or a SubsidiaryLedger.Subsidiary Ledgers - The accounts used by most departments will be part of a subsidiaryledger. Subsidiary ledgers contain the revenue and expenditure accounts. Each account,depending on its nature, will show data on the fiscal year basis (July 1 to June 30) or on aproject-to-date basis (from the date the project began to the present date). For example, agrant would be on a project-to-date cycle, while a state account would be on a fiscal yearcycle. The basic dollar data shown in these accounts are budgets, revenues, expenditures,encumbrances and budget balance available.General Ledger - The general ledger accounts are used to record claim-on-cash, accountsreceivable and other assets, accounts payable and other liabilities and fund balance. Somegeneral ledger accounts will be used to record specific fund additions and fund deductions asaccount activity occurs. Others, with related subsidiary ledger accounts, will carrysummaries of the budgets, revenues, expenditures, encumbrances and budget balanceavailable.Relationship of Ledgers - The subsidiary and general ledger accounts have a predefinedrelationship designed into the system. In some cases there are many subsidiary ledger accountsreporting to one general ledger account. In other instances there is a one for one relationshipbetween the two ledgers. Any transaction posted to a subsidiary ledger account isautomatically posted to its related general ledger account to update the claim on cash, fundbalance and the appropriate summary revenue or summary expenditure control. The updatingof the general ledger is performed simultaneously with the processing of each subsidiaryledger transaction, causing the ledgers to be - always - in balance with each other.