Day Care Center

Day Care Centers is a service available to children who are away from their own

homes for a part of the day. Generally parents seek substitute care for reasons of

employment. The life of day has become extensively busy, so in this busy life people are left

with very little time to give to their children. Need for day care centers increase as more and

more mothers of pre-school age children are forced to find jobs outside the home, which

means mothers who might ordinarily stay at home and care for their own children must seek

income to help make ends meet.

The main purpose of day care centers is to provide facility to those parents who

are very busy in there professional life and they can not take of there children’s. So what they

do is that they go to those day care centers and leave their children’s there, and themselves go

to their work and when they get free from their work, they pick their children’s and go home.

A day care center is an institution where people leave their children’s there. And

these day care centers look after those children’s. They provide those children’s with every

facility they require, they give them toy’s to play with, they feed them, they even give them

activities like building blocks, working with alphabets, teaching them basic

languages(depending on the age).

Requirements of a Day Care Center

A day care center is one of earliest institution for children’s and plays a very

important role in children’s mental, physical development and determining his future. So in

order to manage a day care center, there are certain requirements set by Government of very

country which need to be met before it is allowed to operate. Some of basic requirements of

day care centers are as following:

1. License from the government is needed.

2. A proper and secure building is required.

3. Qualified staff with proper training.

4. In order to entertain children enough toys should be available.

5. Play grounds for healthy activities.

6. Sports equipment.

7. Health requirements.

8. The center should maintain all areas of facilities in clean, safe condition free

hazards to the health and safety of the children.

9. Center shall ensure that all structures, fences, equipment and grounds are

maintained.

10. A Center shall ensure that each child, except school-age children who do not

sleep at the Center, has clean, age-appropriate individual rest equipment such

as a crib, playpen, cot, bed or mat and bedding.

Maintaining Accounts

Charts of accounts

“A Chart of accounts is a list of all accounts tracked by a single accounting system, and

should be designed to capture financial information to make good financial decisions.”

Each account in the chart is assigned a unique identifier, typically an account number. Each

account in the Anglo-Saxon chart is classified into one of these five categories:

1) Assets 2) Liabilities 3) Equity 4) Income 5) Expenses.

Account Order

Account categories are presented in a standard order, beginning with the accounts presented in the Statement of Position (Balance Sheet.) These are:

Assets

Assets are the tangible items an organization has as resources, including cash, accounts receivable, equipment and property. Assets are usually listed in descending order of liquidity. This means that cash and other assets which are easily converted to cash are listed first, and fixed assets such as property and equipment are listed last. Asset accounts usually start with the number "1."

Liabilities

Liabilities are obligations due to creditors, such as loans and accounts payable. Current liabilities, those obligations which fall due within the next year, are usually listed first, followed by long-term liabilities. Accounts payable and payroll taxes payable are usually listed before other payables. Deferred revenue and other liabilities are often further down on the list. Liabilities often begin with the number "2."

Net Assets (or Fund Balances)

Net assets, formerly referred to as the fund balance(s), reflect the financial worth of the organization. They represent the balance remaining after obligations are subtracted from an organization’s assets. Organizations which only receive unrestricted gifts will have only one net asset account. Those with temporarily or permanently restricted net assets, such as endowments will have more than one net asset account. Net asset accounts begin with the number "3."

Income and Expense

These accounts follow the Statement of Position Accounts.

Note that the chart of accounts lists the accounts that are available for recording transactions. In keeping with the double-entry system of accounting, a minimum of

two accounts is needed for every transaction--at least one account is debited and at least one account is credited. Though this is not needed when you are using some accounting software as they do the 2nd step automatically by themselves.

Day Care Center – Chart of Accounts

Most of Day care centers working in Pakistan non-profit type of organizations. There do exists a good number of day care centers which are run for profit purpose but since most of them are of non-profit type so the chart of accounts we are presenting here is of non-profit day care center. Chart of accounts for a non-profit organization is quite different from profit based organizations. Chart of Accounts of non-profits are also called UCOA (Unified chart of accounts). These were prepared by CAN and NCCS.

In below is given a sample chart of accounts for a small non-profit day care center. Balance amounts are not given since they are usually kept confidential. Title of different accounts along with their class type and identifying number are given as they appear in chart of accounts.

Number Account Title Type Balance ($)1010 Cash in Bank - operating Assets-Bank1040 Petty cash Assets-Bank1110 Accounts Receivable Assets-A\R1131 Tuition Receivable Assets-A\R1240 Grants Receivable – Government Assets-A\R1241 Grants Receivable – Miscellaneous Assets-A\R1245 Discounts- Long term Grants Assets-A\R1299 Un deposited Funds Other current Assets1450 Prepaid Expenses Other current Assets1610 Land Fixed Assets1620 Building Fixed Assets1640 Furniture Fixed Assets1650 Transportation Vehicles Fixed Assets1725 Acc. Depreciation – Land Fixed Assets1745 Acc. Depreciation – Building Fixed Assets1755 Acc. Depreciation - Vehicles Fixed Assets2010 Accounts Payable Liabilities – A\P2021 Salaries Payable Liabilities – A\P2050 Credit Card Liabilities – other2150 Accrued Expenses – other Liabilities – other3000 Un restricted net assets Equity3001 Opening Bal Equity Equity

3100 Temporarily restrict net assets Equity3200 Permanently restrict net assets Equity4130 Gifts Income4150 Donated use of facilities Income4230 Trust Grants Income4530 Business \ Industries Grants Income4540 Local Government Grants Income5210 Membership dues - individuals Income5490 Miscellaneous Revenue Income5800 Special events - functions Income7040 Awards for members and donors Expense7060 Benefits paid to or for members Expense7210 Salaries – management Expense7220 Salaries - Teachers, Baby sitters Expense7240 Employee benefit plans Expense7510 Fund raising expenses Expense7530 Legal fees Expense8110 Supplies Expense8130 Communications – Telephone, Postage, Internet e.g. Expense8190 Publications and Printing expenses Expense8220 Utilities Expense8230 Real state Taxes Expense8260 Maintenance Expense8400 Depreciation Expense Expense8570 Advertising Expense Expense8590 Other Expenses Expense8591 Bank services charges Expense8650 Other Taxes Expense9830 Capital purchases – Equipment Other Expense

NOTES

There may be number of titles\terms you might have come across for the first time while observing chart of accounts (chart of accounts for non-profits to be specific). In below we have done an effort to make you understand those new terms by giving little descriptions of them and how they work in accounting system.

UCOA, CAN and NCCS

UCOA© is the Unified Chart of Accounts for nonprofit organizations that was developed by the California Association of Nonprofits (CAN) and the National Center for Charitable Statistics (NCCS). This standardized chart of accounts was designed so that nonprofits can quickly and reliably translate financial statements into the categories required by IRS Form 990, the Federal Office of Management and Budget, and other standard reporting formats. UCOA also seeks to promote uniform accounting

practices throughout the nonprofit sector. UCOA was developed by a consortium of various nonprofit organizations.

PETTY Cash

Physical cash retained by an entity in order to pay for small items of goods and services.

Unrestricted NET ASSETS

The part of net assets of a not-for-profit organization that is neither permanently restricted nor temporarily restricted by donor-imposed stipulations. Unrestricted support, Revenues or gains from contributions that are not restricted by donors. See also restricted support.

Donor-imposed Restriction

A donor stipulation that specifies a use for the contributed asset that is more specific than broad limits resulting from the nature of the organization, the environment in which it operates, and the purposes specified in its articles of incorporation or bylaws, or comparable documents for an unincorporated association. A restriction on an organization's use of the asset contributed may be temporary or permanent.

Restricted NET ASSETS

Resources whose use is restricted by donors as contrasted with those over which the organization has complete control and discretion. Restricted net assets may be permanently or temporarily restricted.

PERMANENT Restriction

A donor-imposed restriction which stipulates that resources be maintained permanently but permits the organization to use up or expend part or all of the income (or other economic benefits) derived from the donated assets.

PERMANENTLY restricted net ASSETS

The part of the net assets of a not-for-profit organization resulting from (a) contributions and other inflows of assets whose use by the organization is limited by donor-imposed stipulations that neither expire by passage of time nor can be fulfilled or otherwise removed by actions of the organization, (b) other asset enhancements and diminishments subject to the same kinds of stipulations, and (c) reclassifications from (or to) other classes of net assets as a consequence of donor-imposed stipulations.

TEMPORARY Restriction

A donor-imposed restriction that permits the donor organization to use up or expend the donated assets as specified and is satisfied either by the passage of time or by actions of the organization.

TEMPORARILY restricted net ASSETS

The part of the net assets of a not-for-profit organization resulting from (a) contributions and other inflows of assets whose use by the organization is limited by donor-imposed stipulations that either

expire by the passage of time or can be fulfilled and removed by actions of the organization pursuant to those stipulations, (b) other asset enhancements and diminishments subject to the same kinds of stipulations, and (c) reclassifications to (or from) other classes of net assets as a consequence of donor-imposed stipulations, their expiration by passage of time, or their fulfillment and removal by actions of the organization pursuant to those stipulations.