Hello. Thanks for this service. I am a new user of version 10. Here is my question regarding set-up of restricted accounts:
For each donor restricted account, I have an equity, revenue, and release from restriction account (example 4840-104 is the release acct.) When I am recording a transaction to release from restrictions, the system also uses account 4999. I don't really understand the difference between the 4840-104, which is the one I set-up, and the 4999. (When I am recording a transaction to release from restriction, I need another account to debit in order to balance.) I didn't really want to set up expense accounts for each donor restrcited account, but I can if that's the best way.
An illustrated example:
contribution for building improvement restricted revenue $100
Payment for paint (release) cash credit $50
release from restric, acct 4840-104 debit $50
system generated release acct 4999 credit $50
now, what else do I debit for $50---a new expense account???
Thanks for any suggestions and insights.
Donor Restricted Accounts
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Zorak
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The difference between your 4840 account and the 4999 account is the equity account that each one closes to.
Every release transaction that is processed will do the following:
4800 (restriction specific release account) debit
4999 (system-wide "released" account) credit
In debiting your 4800 account, negative income is processed, which takes money out of the restricted equity account.
In crediting the 4999 account, positive income is processed, which adds money to the unrestricted equity account.
In your example you would need a "paint" expense account, or a more general "building improvements" expense account.
You then debit that expense account, which takes the money back out of the unrestricted equity account, and credit the money out of the bank.
Every release transaction that is processed will do the following:
4800 (restriction specific release account) debit
4999 (system-wide "released" account) credit
In debiting your 4800 account, negative income is processed, which takes money out of the restricted equity account.
In crediting the 4999 account, positive income is processed, which adds money to the unrestricted equity account.
In your example you would need a "paint" expense account, or a more general "building improvements" expense account.
You then debit that expense account, which takes the money back out of the unrestricted equity account, and credit the money out of the bank.
Restricted Accounts
Thank you, Zorak, for your help and answering so promptly. I have another question that spurs from the original one.
When I set up expense accounts for each restricted fund, shall I have the expense account close to unrestricted net assets?
Thanks again.
When I set up expense accounts for each restricted fund, shall I have the expense account close to unrestricted net assets?
Thanks again.