Recording investments in CDs

fstuart · Post by **fstuart** » Sun Aug 20, 2006 10:10 pm

I am about to write a $40,000 check to a bank in order to buy one year CD. My questions:

1. Do I need to create another FUND in PC+? I currently have a General Fund (10-fund) and a Fund for the Future (30-fund).

2. If I need to create another fund (say, a 40-fund), what should I name it and what would the entries be (how would the 10 fund be credited or debited and the same question for the investment fund (say, the 40 fund)? Here is a list of my asset lines in the general fund chart of accounts:

101000000 ASSETS Asset
101050000 BANK ACCOUNTS Asset
101100000 CHECKING ACCOUNTS Asset
101110000 Main Checking Account Asset
101200000 SAVINGS ACCOUNTS Asset
101210000 Main Savings Account Asset
101250000 CASH ON HAND Asset
101300000 INVESTMENTS Asset
101500000 FIXED ASSETS Asset
101501000 LAND Asset
101600000 BUILDINGS Asset
101699000 Accum. Depr. - Buildings Asset
101700000 VEHICLES Asset
101799000 Accum. Depr. - Vehicles Asset
101800000 EQUIPMENT Asset
101899000 Accum. Depr. - Equipment Asset
101900000 OTHER ASSETS Asset

Forrest Stuart

NeilZ · Post by **NeilZ** » Sun Aug 20, 2006 10:27 pm

I'm not an accountant, but I wouldn't think you would need to create another fund in Fund Accounting for this. If the money is coming out of the general fund, then it should be tracked as savings under that account.

Post by **Zorak** » Mon Aug 21, 2006 9:47 am

Certainly PowerChurch will function properly in handling this CD either way.

The important thing to remember, before adding a new accounting fund, is that each fund represents a self-balancing chart of accounts. If you are only going to have an asset account holding the balance of the CD, and equity to offset it, that doesn't really qualify as something that would need its own fund.

If you do choose to set it up in a separate fund, PowerChurch Plus, as I said before, will function properly.

fstuart · Post by **fstuart** » Mon Aug 21, 2006 8:57 pm

I will probably keep it in the general fund, then (the "10-fund).

So, when I write a check to the bank for the purchase of a CD, my main checking account (10-1110) will be credited, and my investment account (10-1300) will be credited.

Am I correct on this? I'm not sure where the "equity" account fits in as you mention in your reply, Zorak. Please help me understand this.

Thank you.

Post by **Zorak** » Tue Aug 22, 2006 9:18 am

fstuart wrote:So, when I write a check to the bank for the purchase of a CD, my main checking account (10-1110) will be credited, and my investment account (10-1300) will be credited.

The 1300 account would be debited, which will increase the balance.

fstuart wrote:I'm not sure where the "equity" account fits in as you mention in your reply, Zorak.

The equity account will not come into play if the money is already in your system, just being "transferred" or "moved" to a different account.