Year End Transaction

[Eden Whitehead]

At the end of the fiscal year, this church transfers interest earned YTD in the 2 restricted checking accounts (building fund & memorials) to the savings account. When I enter these transactions should I (or should I not) check the "Year end transaction" box in the dialogue?

What happens accounting-wise if I do check the box? if I don't?

Thanks!

[Jeff]

The end of year transactions are a way to separate year end closing entries from the December accounting month. When you run a balance sheet or income & expense statement through the last month of an accounting year, you will see the option to include these year-end transactions.

The problem in prior versions of PC+ was that year end accruals like depreciation were lumped into the last accounting month of the year. When you looked at the individual month, it would distort the reports for the month because it included all these entries.

That is why we added the year-end transaction option in version 9. It was desinged to use for yearly adjustments like depreciation and other non-cash expenses. The idea was you could run reports for December without including year end-transactions and you could see what happened in December without including the year-end accruals. Then you could run yearly reports and include the year-end transactions to get a complete picture for the whole year.

So to answer your question, your transaction won't effect the income statement, which is where it is easier to see the effects of year-end transactions. (i.e. Why did we have so many expense in December?) If you post it as a year-end transaction, you will need to run 2 balance sheets, one for the end of Decmber and a separate balance sheet for the end of 2007. The end of December balance sheet will still show the money in the restricted checking accounts, while the end of 2007 balance sheet will show the money in the savings accounts.

[Eden Whitehead]

Jeff, Thank you for your very thorough and helpful answer.