UA-R-GC-1914-01-01-1977-02-15_Page-058

THE AMERICAN UNIVERSITY IN CAIRO NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1976 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: t- , (a) Accrual Basis The financial statements of the University have been prepared on the accrual basis except for the accounting followed for the plant fund as described elsewhere in this note. The statement of current funds revenues, expenditures and other changes is a statement of financial activities of the unrestricted and +estricted current funds related to the year ended August 31, ~1976. It does not purport to present the results of operations or the net income or loss for the period as would a statement of income or a statement of revenues and expenses . Current funds are used to finance plant fund additions and replacements of ~rniture, fixtures and e~uipment. The amounts so provided are accounted for as expenditures in the year incurred. (b) Fund Accounting ~. In orde~ to ensure observance of limitations and restrictions placed op the use of the resources available to the University, the accounts are maintained in accordance with the principles of "fund accounting" whereby resources for various ~purposes are classified for accounting and reporting purposes into funds that are in accordance with activities or objectives specified. In the accompanying financial statements, funds that have similar characteristics have been combined into fund groups. ~.ccordinglY , all financial transactions have been recorded and reported by their respective fund group. (1) Restricted Funds Within the current fund group, fund balances re~ stricted by outside sources have been reported as restricted funds. These restricted funds may only be utilized in