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Department of Human Services, Victoria, Australia
Service Agreement Information Kit

6.5 Glossary of Financial Accountability Terms

Accrual accounting

A system that records expenses in the period in which they were incurred regardless of when the cash is actually paid out (for example, depreciation or long service leave). In the case of revenue, this is recorded in the period in which it was earned regardless of when cash is actually received (for example, unpaid fees). Activity

The specific health or community services operation carried out under the department output. For example, occasional care is a service activity under children's services.

Assets

Service potential or future economic benefit controlled by the organisation as a result of past transactions or other past events.

Cash accounting

A system that records cash payments made and funds received.

Current assets

Cash or assets that are intended to be converted to cash within a 12-month period (for example, petty cash advance and debtors).

Current liabilities

Amounts owed by the organisation to outside parties that are intended to be paid within a 12-month period (for example, creditors and bank overdraft).

Liability

An obligation to pay in the future for a past transaction or event.

Non-current assets

Assets that are not intended to be converted to cash within a twelve-month period. These are not purchased with the intention of resale (for example, vehicles, furniture and fittings, land and buildings).

Non-current liabilities

Amounts owed by the organisation to outside parties that are not required to be repaid in full within a 12-month period (for example, mortgage and loans).
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