Move $$ from pass-thru to designated?

Eden Whitehead · Post by **Eden Whitehead** » Fri Dec 21, 2007 2:38 pm

I'm seeking guidance in how to handle this situation correctly.

A new user of PC+ 10.4 (MR 12/18/2007) on Windows XP.

Last month I set up a liability/pass-thru account to handle the annual purchase of poinsettias from a local charitable foundation that uses this seasonal sale as a fund-raiser. As orders/payments came in I credited them to 01-2320-000 and debited General Checking 01-1110-000 (where the $$ was deposited). When the invoice came in I did the reverse: debited 01-2320-000 and credited 01-1110-000. All well and good at this point (I think! I sincerely hope ... or I'll never get it right!).

So here's the question: The invoice from the foundation was for less than the amount collected/deposited, leaving a balance of $105.00 in the pass-thru account. Several members had noted on the order form that they wanted the money to be used either for poinsettias or for other use at the discretion of the Christmas decorating committee. We have already set up a donor restricted income account 01-4210-108 for contributions designated for Christmas decorations. I *think* the thing to do is to move the balance from the pass-thru to the restricted income account with this transaction:

DB 01-2320-000 $105.00
CR 01-4210-108 $105.00

Is this correct? If not, what *is* the correct way to handle this?

Also, what effect will this transaction have on the related equity account 01-3210-108? on any other equity account?

Thanks once again.

And a most blessed and joyous Christmas to everyone at PowerChurch Plus and to all you wonderful folks on the forum!

Post by **Jeff** » Fri Dec 21, 2007 6:10 pm

It looks like you have it correct. Your transaction will reduce the liability account and increase the income account. In turn when the income account is increased it will increase the associated equity account. So it looks like everything is correct.

You can enter your journal entry in Fund Accounting and run the Income and Expense and Balance Sheet reports including unposted items to make sure it does what you expect it to.