Accounting Entry
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Accounting Entry
We collect money from members for Youth trips or seminars that each person for the activity . How should the funds be recorded on account side (chart of accounts)?
Re: Accounting Entry
More information is needed:amber106 wrote:We collect money from members for Youth trips or seminars that each person for the activity . How should the funds be recorded on account side (chart of accounts)?
Are the trips budgeted out of the church expenses? If so, it should be entered in an income account, but not as tithes and offerings, and not listed as a 'contribution' on anyone's contribution statement.
Is the money 'passed through' to another organization? Then it should be entered into a 'pass through' liability account, as it is not income to the church.
Neil Zampella
Using PC+ since 1999.
Using PC+ since 1999.
Re: Accounting Entry
Thank you for your response.
The money collected is not part of the Churh's budget. The Church holds the money for each member and keeps track of each member's amount until the total money is received for the event. Once all the money is collected, the chuch then pay the appropriate people for the event.
Additionally, you mentioned it could be a Pass-Thru. However, I read on Power Church - Accoounting for Contributions that "Typically a contribution would only be accounted for as a pass-thru contribution when you turn the money over to another NON-profit organization". Please let me know your oponion of this also.
Thank you
The money collected is not part of the Churh's budget. The Church holds the money for each member and keeps track of each member's amount until the total money is received for the event. Once all the money is collected, the chuch then pay the appropriate people for the event.
Additionally, you mentioned it could be a Pass-Thru. However, I read on Power Church - Accoounting for Contributions that "Typically a contribution would only be accounted for as a pass-thru contribution when you turn the money over to another NON-profit organization". Please let me know your oponion of this also.
Thank you
Re: Accounting Entry
Very true, but this is not really a contribution. Its basically a layaway type of payment system, it does not create income for the church, the money given is not a contribution, people don't get a tax deduction for this, and its given to a third-party for services. So, the Chart of Accounts, you should use a liability account for this, as the church has a liability to pay out this money to a third-party in payment for services rendered to the person who gave the funds.amber106 wrote:Thank you for your response.
The money collected is not part of the Church's budget. The Church holds the money for each member and keeps track of each member's amount until the total money is received for the event. Once all the money is collected, the church then pay the appropriate people for the event.
Additionally, you mentioned it could be a Pass-Thru. However, I read on Power Church - Accounting for Contributions that "Typically a contribution would only be accounted for as a pass-thru contribution when you turn the money over to another NON-profit organization". Please let me know your opinion of this also.
Thank you
Neil Zampella
Using PC+ since 1999.
Using PC+ since 1999.
Re: Accounting Entry
I have a follow up question and comment.
My accountant does not think the activity should be a liability and should not be listed on the Balance Sheet side. Below is the accountant comment as to how the transaction should be done:
"The accounts will appear somewhere on the Income Statement*, where depends on if the event made a profit for the church or not. Only the net profit of each event will be moved to income. Again they are transition accounts that can keep track of income and expenses and will be adjusted to the appropriate account at year end. There are many adjustments that get made by an accountant at year end, this is just one of them".
Any comments would be appreciated.
My accountant does not think the activity should be a liability and should not be listed on the Balance Sheet side. Below is the accountant comment as to how the transaction should be done:
"The accounts will appear somewhere on the Income Statement*, where depends on if the event made a profit for the church or not. Only the net profit of each event will be moved to income. Again they are transition accounts that can keep track of income and expenses and will be adjusted to the appropriate account at year end. There are many adjustments that get made by an accountant at year end, this is just one of them".
Any comments would be appreciated.
Re: Accounting Entry
Based on what you told me, this will not be income to the church, the amount that will be collected, will then be given to the third-party.amber106 wrote:I have a follow up question and comment.
My accountant does not think the activity should be a liability and should not be listed on the Balance Sheet side. Below is the accountant comment as to how the transaction should be done:
"The accounts will appear somewhere on the Income Statement*, where depends on if the event made a profit for the church or not. Only the net profit of each event will be moved to income. Again they are transition accounts that can keep track of income and expenses and will be adjusted to the appropriate account at year end. There are many adjustments that get made by an accountant at year end, this is just one of them".
Any comments would be appreciated.
If that is incorrect, and the church will be seeing some income once the third-party is paid, then the accountant is correct.
I took from what you were saying the church is merely acting as the collector, and nothing shows as income to the church.
Neil Zampella
Using PC+ since 1999.
Using PC+ since 1999.
Re: Accounting Entry
Thank you for your response..