Page 55 - July1998

Julv 1998 NATIONA'I B{JlfllONEIJntElllN 191

National Button Society
Notos to Financial Statemsnts
December 31,1997

Note 1 - General Accounting Policies
The National Button Society is a nonprofit corporation providing publications and
conventions to its members. lts nonprofit status is granted under Section 501(c)(7)
of the lnternal Revenue Code

The Organization uses the cash basis of accounting in preparing its financial state-
ments, a comprehensive basis of accounting in which revenues are recorded when
received and expenses are recorded when paid. Revenues received in the period fot
a future year are deferred until the year in which they are earned.

Inventory is stated at the lower of historical cost or market. Obsolete inventory is
written off as a current expense.

The Organization uses the fund basis of accounting, and maintains an operating or
general fund, and ihree restricted funds: the Memorial Fund, the Life Fund and the
Adams and Member Supported Color Fund. The restricted cash balances of each
fund are segregated on the statement of assets, liabilities and fund balances.
Interest income from the Life Fund is available for general operations, and is trans-
ferred annually to the General Fund. Interest income from the Color Fund is the
primary source for underwriting the cost of color pages in the bulletins.

Note3-Fixedassets
Fixed assets are recorded at cost and depreciated using the straight line method
over their economic lives. Major categories of assets are as follows:

Current Accum-
Oescriotion Cost Deor. Deor.
Computer and Photo Equipment 9 5,511 $ 644 I 5,044
Library 3.425 363 3,309
Racks and Shelves 2.743 -O- 2.743
Total s_ll-€79 t____taoz _$__ll-o90
,

Non-profit organizations, while generally tax-exempt, are taxed on their unrelated
business income. For a Section 501 (c)(7) corporation, tax is paid on interest
income and publication advertising sales. During 1997, $2,OOO was paid toward
this obligation.

See accompanying accountants' reporl