Changing an Asset to a Liability

[SheilahH]

I need to move funds that were previously in an checking fund (asset) to a liability account. I know this is the right thing to do now but cannot figure out how to do it. The reason I need to to do it...I had been depositing the money that the church allocates for the Pastor's retirement and medical into an asset account and then paying his retirement and insurance costs from there. I now know that this should be viewed as a liability. Seems like every year I learn something that I'm doing wrong. Please help. (using Version 9)

Sheilah

[JohnDMeyers]

You did need to DB some asset account (checking account is fine). The issue is which account did you CR?

You needed to CR the liability account.

When you originally moved the money into checking, did you CR an income account?

If so, you can simply DB the income account and CR the liability account.

If you transferred the money from asset account to another, then you would DB the original asset account that you used for CR. The reason is that the money never left your organization. You showed it moving to a different asset account by creating a DB to an asset and a CR to a liability, which is a net cash move of zero.