Moving Equity account to Liability

[Airforcemom]

We had a couple of accounts there were set up as a Equity account, but really should be in a liability account.
One has some funds in it - the other has no balance.

What is the best way to correct this as we start the new year?

[NeilZ]

We had a couple of accounts there were set up as a Equity account, but really should be in a liability account.
One has some funds in it - the other has no balance.

What is the best way to correct this as we start the new year?

You can't change the accounts from Equity to Liabilities. You'd have to create new Liability accounts and then mark the old one's inactive. As far as the one with funds in it, Net Asset (equity or Fund Balance) accounts are usually used to determine how much an organization is worth. Normally these accounts are used as 'closing' accounts that the system updates automatically, so that whenever you add assets it will subtract any liabilities and show the Net Asset/Equity/Fund Balance using the formula (from page 172 of the manual) assets - liabilities = equity. Assets are what the church owns minus what the church owes.

So these equity/net asset/fund balance accounts have your asset account(s) (checking, savings, etc) and liabilities (expense, liability accounts) closing to this account. The system keeps these accounts up to date. So before you can move fund from the one equity account that was created in error, you have to check to see what closes to it. You can do this by using the Account Close To Report in Fund Accounting Reports. If there is nothing listed as closing to that account, you can then DB this incorrect account and move the funds by CR the new liability account.

However, if you have other accounts closing to that one, then its a completely different problem. Let us know what you find.