ACC-325 focuses specifically on nonprofit accounting, extending the fund-accounting concepts introduced alongside governmental accounting into the particular reporting requirements, donor-restriction rules, and accountability standards nonprofit organizations must follow.
Donor restrictions and fund accounting in nonprofits
The course covers how nonprofits track resources according to donor-imposed restrictions, temporarily restricted, permanently restricted, and unrestricted funds, ensuring donations are used exactly as the donor intended.
Nonprofit-specific financial statements
ACC-325 covers the statements nonprofits produce that differ from for-profit reporting, including the statement of activities and statement of functional expenses, which reflect a nonprofit's mission-driven accountability rather than profitability.
Key topics in ACC325
- Donor-restricted versus unrestricted funds
- Fund accounting in the nonprofit context
- The statement of activities
- The statement of functional expenses
- Grant accounting and compliance
- Nonprofit accountability and transparency standards
Working on your ACC-325 assignments?
Our accounting experts help with ACC-325 nonprofit accounting case studies and fund analyses.
Worked example: tracking a restricted donation correctly
- Donation: A donor gives funds specifically restricted to a scholarship program
- Improper tracking: The funds are pooled with general operating resources
- Proper fund accounting: The restricted funds are tracked separately and only released to the scholarship program as intended
- Lesson: ACC-325 teaches that nonprofit accounting exists specifically to honor donor intent, not just to produce accurate totals
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Frequently asked questions
Donors and grant funders often give money for a specific purpose, a particular program, a scholarship fund, a capital project, and nonprofits have a genuine fiduciary obligation to spend that money exactly as intended, not simply to use it for whatever operating need happens to be pressing. ACC-325 teaches careful fund tracking (separating restricted from unrestricted resources) because failing to honor these restrictions isn't just poor bookkeeping. It can violate the actual terms donors and funders agreed to when they gave the money, with real legal and reputational consequences.
A for-profit income statement is built around measuring profitability, which isn't the nonprofit's purpose, while a statement of functional expenses instead shows how resources were spent across program services, management, and fundraising. Directly answering the question donors and watchdog organizations actually care about: how much of the money went toward the mission versus overhead. ACC-325 covers these nonprofit-specific statements because they reflect genuinely different accountability, reporting on mission-driven stewardship of donated resources rather than on generating a financial return.