Fund accounting is an accounting method used predominantly by non-profit organizations, government entities, and academic institutions. It focuses on accountability over profitability and categorizes financial resources into funds. Each fund acts as a self-contained accounting entity with its specific resources and obligations limited to a defined purpose or restriction. For instance, a university may have separate funds for student scholarships, building maintenance, and research. Fund accounting ensures that the use of resources complies with stipulated restrictions, fostering transparency and trust among stakeholders. This system contrasts with profit-driven accounting by emphasizing how funds are spent rather than overall net income. For example, if a donor provides money specifically for scholarship programs, fund accounting ensures that the donation is used for this purpose. It is also used to manage grants and restricted donations effectively. Statements in fund accounting are tailored to display the movement and allocation of funds, such as Statement of Activities for non-profits and Government Fund Statements for public organizations.