Budgets are the most widely used method for control in colleges and universities. Fund accounting assists in budget control through providing information to enable managers to keep expenditures within allocation and demonstrate compliance with funding sources. Budget entries are the reverse of financial entries; revenue entries are budgetary debits and appropriations to expenditure accounts are budgetary credits.
Fund accounting is an accounting system emphasising accountability rather than profitability, used by non-profit organisations and governments. In this system, a fund is a self-balancing set of accounts, segregated for specific purposes in accordance with laws and regulations or special restrictions and limitations
The label, fund accounting, has also been applied to investment accounting, portfolio accounting or securities accounting; all synonyms describing the process of accounting for a portfolio of investments such as securities, commodities and/or real estate held in an investment fund such as a mutual fund or hedge fund. However, investment accounting is a different system, unrelated to government and non-profit fund accounting.