Key points

• There are two main types of financial accounts, receipts and payment accounts or full accrual accounts.
• Fund accounting is a key element - charity funds are divided into permanent endowment, restricted, unrestricted and designated categories.
• The voluntary sector has its own internally produced guide on accounting - the Statement of Recommended Practice or SORP.
• There are four essential elements of charity accounts: the trustees' annual narrative report; the SOFA; a statement of assets and liabilities or balance sheet; and supporting notes.