User Support Forum

Hello,
In 2017 a donation was given by an outside organization and put into a liability account when deposited for hurricane relief. The money was donated online using a credit card and when the credit card bill was paid in 2017 it was paid from the general fund and that liability was never decreased. With a change in our staff this was realized just recently. We are trying to decrease that liability by $775.00 and I am unsure how to do that.

I know to decrease the liability it would be a debit but I am unsure of what the corresponding credit would be. Or am I completely misunderstanding this and need to do something different?

Could someone help with this?

RevTyler wrote:Hello,
In 2017 a donation was given by an outside organization and put into a liability account when deposited for hurricane relief. The money was donated online using a credit card and when the credit card bill was paid in 2017 it was paid from the general fund and that liability was never decreased. With a change in our staff this was realized just recently. We are trying to decrease that liability by $775.00 and I am unsure how to do that.

I know to decrease the liability it would be a debit but I am unsure of what the corresponding credit would be. Or am I completely misunderstanding this and need to do something different?

Could someone help with this?

Just credit Miscellaneous Income, since the funds were given and directly put into Liability, they were never declared as income in the first place, so what you're doing is putting the funds in unrestricted net assets basically reimbursing the church for the original debit.

It would have been better if it was done in 2017, but better late than never

It would look like this:

xx-2300-000 Liability DB 100.00
xx-4300-000 Income CR 100.00

Hope this helps