transferring money

[mlcrumpton]

Matt, because I actually took that money out of 4012 and put into the memorial checking account...it is no longer in the regular checking account.
When I look at my budget report, it shows up under income; just like tithes, bank interest, etc. But, since I actually deposited it into another checking account, I figured I need to show that somewhere in the 4012 account.

Thanks!

[Zaina]

An income account is not a bank account. The bank account that the money is physically in doesn't change the amount of total income that was received for that particular giving. How much did you actually receive? That is the amount that should show in the income. Then in addition, it should be sitting in a bank account. Let's say I put all of my paycheck into my savings. Then as I need it, I go online and transfer it to my checking. The amount of money I earned (income) doesn't change. I still have to report that at the end of the year on my taxes no matter what I spent it on or how much is left in either account. The amount in one bank account decreases (savings) by the amount I transfer to checking. But my checking increases now by the amount I have moved into it.

If you have spent the money on something and used an expense, the total amount of income you received is still the same even if you have zero money actually left. That amount of income shouldn't change even if all of the money is spent, the amount you have received doesn't change. If the income is associated with an equity account (also called Net Asset or sometimes Fund Balance, but is typically a 3000 account no matter what its called) then it will show that income. The 'trick' is to either have an expense also close to that. Or for a donor restriction, it should be set up with a release account. At any rate, this other account is used for out-going money so that total expense for that ministry reduces that equity account. The Income and Expense will show total in and total out. The equity account then shows what the remaining balance is for that ministry which should be also reflected in some bank account.

[mlcrumpton]

It's like a light bulb just went on inside my head. All correcting transactions have been made, both checking accounts are balanced and the balance sheet is correct. I am sorry that it took so long for me to grasp the "income" account and how it works. I thank God for each one of you that had the patience to continue drilling this into my head.
Again, THANK YOU!
Happy Thanksgiving!