Assets are what the program owns or is owed: cash, money families and the State owe you, prepaid insurance, furniture, equipment, and building improvements.

Liabilities are what the program owes: unpaid vendor bills, payroll that has been earned but not yet paid, credit card balances, and loans.

Equity is what is left: assets minus liabilities. Nonprofits call this net assets.

Two terms you will see in every lesson:

• Accounts receivable (AR): money owed to the program, such as tuition families have been billed but have not paid, or CCS invoices the State has not paid yet.
• Accounts payable (AP): money the program owes to others, such as a food vendor’s bill that is not due yet.