Correcting Temporarily Restricted Fund Balance

Pam · Post by **Pam** » Wed Mar 11, 2009 1:56 pm

In January of this year, we opened Benevolence Savings account.

In February I set up a Temporarily Restricted Account for Benevolence.

How do I get the dollar amount in the Temporarily Restricted Account to match the savings account balance?

It is a difference of $100.00, which is the amount that was used to open the savings account.

Thank you!

JohnDMeyers · Post by **JohnDMeyers** » Thu Mar 12, 2009 12:34 pm

You would DB whatever account you used to receive the money as income and CR your Temporarily Restricted Income account.

Pam · Post by **Pam** » Thu Mar 12, 2009 12:39 pm

I credited the checking account and debited the savings account.

It was a transfer from one account to open the other.

I'm not sure I understand how this would work, without causing my account balances to be out.

JohnDMeyers · Post by **JohnDMeyers** » Thu Mar 12, 2009 1:36 pm

I mean before the transfer. The day that you actually received the money.

I'm guessing from our previous discussion that you used the Contributions module to DB checking and CR Benevolence expense - right?

Pam · Post by **Pam** » Thu Mar 12, 2009 1:53 pm

No, this is a different issue altogether.

The $100.00 was actually just an amount that was decided to be used to open the account. It was not designated by anyone. We just moved it from general checking to open the Benevolence Savings Account.

I have $100.00 more in the savings account than I do in the restricted Benevolence Fund account, as a result.

Any suggestions?

By the way, I appreciate your help on the previous issue. I was able to clear it up, and that one is now in balance.

Is there a report that shows the details with individual dollar amounts of every account balance that closes to the 3110 account at the end of the year? I had a total when I pulled the 3110 account activity report at the end of the year, but it was not a detailed listing of what made up that total, when the new budget was created.

Thanks so much!

JohnDMeyers · Post by **JohnDMeyers** » Thu Mar 12, 2009 2:21 pm

The answer to the first part is that you have to go back to the day when you received the money and see which two accounts you used to enter the receipt.

For example, if you received the money through a contribution fund, it would usually DB checking and CR general tithes. Let's call it $800.00 that you eventually wanted to be restricted.

You apparently moved $700.00 from unrestricted income to Temporary Restricted.

At some point, you moved $800.00 from checking to savings by CR checking and DB savings.

Now you need to "restrict" that $100.00 by finding the original income account and DB original income and CR Temporary restricted income, or whatever two accounts you used to move the $700.00 in my example.

JohnDMeyers · Post by **JohnDMeyers** » Thu Mar 12, 2009 2:29 pm

The income and expense report will show you subtotal of unrestricted income (which closes to 3110, unrestricted net equity) as well as subtotals for temporary restricted (closes to temporary restricted) and permanent restricted.

Is that what you need?

Pam · Post by **Pam** » Thu Mar 12, 2009 2:42 pm

My problem was created because I did not set up the Fund for Benevolence until after I had opened the savings account. So the balance that is showing in the restricted account was actually from donations received after that date for that designated account.

I think I see what you mean, though. It sounds like I need to transfer $100.00 from the Contribution Income account to the Temporarily Restricted Benevolence Account. Is that right? It sounds like I did not think that one all the way through, and posted only part of the entries when I made the transfer.

On the second part, what I was hoping to see was any expense account that had a balance at the end of the year, that would have closed to the 3110 account. I had (3) accounts that I had been posting credits to, besides the Benevolence that we first talked about, instead of setting up Fund accounts. I think I have identified them and corrected them for this year, but thought it would be helpful to be sure that I am not missing anything.

This is the first time that I have used Temporarily Restricted Accounts AND gone through a year end, copying of the budget. I will be much better prepared for the years going forward, having realized the repurcussions of the way I was making the entries! I thought that I could effectively carry credit balances in the expense line item, as long as I was "washing" it out with an anticipated offset by the end of the year. Guess What? It didn't happen!

NOW, I know the importance of carrying these balances in the Liability and Income accounts, if they are going to be carrying over to the new year.

I know I still have a lot to learn, but am enjoying working in PowerChurch and very grateful for your guidance!

Thanks so much, yet again!

JohnDMeyers · Post by **JohnDMeyers** » Thu Mar 12, 2009 3:46 pm

There aren't any restricted expense accounts.

Restrictions are place on donation by the donors, and the church honors those restrictions.

So, restrictions deal more with income and equity.

(Equity in the business world is thought of as "retained earnings" or "profit", but we can't use such terms in the not-for-profit world, even though it's alot easier to conceptualize "profit")