Changing Liab Accts. to Equity in V9
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Lori Wright
- Posts: 3
- Joined: Sat Jan 29, 2005 9:32 am
- Location: First Presbyterian Church
Changing Liab Accts. to Equity in V9
In our Designated benevolences Fund, we had set up reserve accounts to hold temporarily restricted funds in prior versions. At the end of the year I "closed" the income and expense accounts to their associated liability account. In version 9, these liability accounts can now be set up as restricted equity accounts. I have set up all of my income, expense(we do not show non-cash assets on the Balance sheet) and release accounts. I have debited the liability account to remove the balance from that section and have credited the release account to show the balance in the equity section. Because these funds are restricted but contributions have already been made, is there something else I need to do in order to set up anything so that the "released from restrictions" account "4999" will work correctly once funds are expensed out?
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Jeff
- Program Development
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- Location: PowerChurch Software
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Lori,
Are you showing the right balances in the equity portion of your balance sheet for each of the restrictions? From your post it sounds like you would be. If I understood you post correctly you debited the liability account and credited the individual release accounts for each donor restriction. This should show the correct balance in each of the equity accounts.
The only other transaction to consider would have been to debit the liability accounts and credit the donor restricted equity accounts directly. The difference of doing the transaction this way is that it would not have shown the money as income for 2005. But I am not really sure what would have been the best way to do it in your case because your adjusting transaction of crediting the liability account effectivley 'deferred' the income to 2005 so showing it as income in 2005 might be seen as appropriate.
Are you showing the right balances in the equity portion of your balance sheet for each of the restrictions? From your post it sounds like you would be. If I understood you post correctly you debited the liability account and credited the individual release accounts for each donor restriction. This should show the correct balance in each of the equity accounts.
The only other transaction to consider would have been to debit the liability accounts and credit the donor restricted equity accounts directly. The difference of doing the transaction this way is that it would not have shown the money as income for 2005. But I am not really sure what would have been the best way to do it in your case because your adjusting transaction of crediting the liability account effectivley 'deferred' the income to 2005 so showing it as income in 2005 might be seen as appropriate.
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Lori Wright
- Posts: 3
- Joined: Sat Jan 29, 2005 9:32 am
- Location: First Presbyterian Church
Moving Liability Accounts to Equity Accounts
I think I was so nervous about posting my first question on the board that I said release when actually I did debit the liability account and credit the equity account. My balances are correct.
I am a little scared of the whole behind the scenes release process and was afraid that since the funds were transferred to the equity account directly, rather than through the new income accounts that close to the restricted equity accounts, that some step was needed. From your response, I guess all is well. Thank you.
I am a little scared of the whole behind the scenes release process and was afraid that since the funds were transferred to the equity account directly, rather than through the new income accounts that close to the restricted equity accounts, that some step was needed. From your response, I guess all is well. Thank you.