This chapter of "Principles of School Business Management" reviews the functions, procedures, and reports with which school business officials must be familiar in order to interpret and make decisions regarding the school district's financial position. Among the accounting functions discussed are financial management, internal auditing, annual independent auditing, and auditing by government agencies. The method of accounting used in public schools is different from both the methods used in private enterprise and the methods used by other government agencies. These differences are reviewed, particularly in the areas of budgetary accounts and funds, changes in terminology, and the school system's fund-based financial structure. Each of the major fund types--budgetary, proprietary, and fiduciary--is described. The system's books are the next topic; general and subsidiary ledgers, the posting process, the bases of accounting, and the maintenance of documentary evidence of transactions are considered. Public school fund accounting equations are presented for different types of funds and account groups. The chapter concludes by discussing and presenting examples of interim and year-end financial statements for each fund and account group. Twenty-nine revelant resources are cited. (PGD)