Negative Balance in Release from Restrictions Account

[Becky Davis]

I have ended up with a couple of negative balances in my release from restrictions accounts. I want to clear this out to begin the new year with everything zeroed out, but Pastor doesn't want to erase everything and start completely over. I know that I can make the account inactive and create a new one, but what happens to that balance if I do that?

Can I do any adjustment that won't reflect negatively on the I&E statement?

I'd like to start the year off correctly. We had more than one person paying the bills and the release accounts were not always used properly. To clarify, for release accounts, both temporary and permanently restricted accounts, am I correct that you need 3 accounts - the income account, the individual release account and the released from restrictions account (4999)?

Help!

[Zorak]

Negative balances in release accounts point to one of three problems:

- More money has been released and spent than was actually available
- Beginning balances were not entered properly, making it appear as stated above
- Release transactions have not been entered properly

Since all related accounts, income (4200), release (4800), and released (4999) are considered income accounts, their balances will be zero at the beginning of a new year.

Equity (or fund balance or net assets) accounts carry a balance from year to year, but income, expense, and transfer accounts do not.