fixing a "loan"

[gospeltab]

We are running v.11

In December the board authorized a payment to a local auto shop to cover car repairs for a member of our congregation. I did a credit to the general checking account and a debit to "gifts".

This month they repaid the money. Now I am not sure what to do with the whole transaction. If I debit the checking account and credit "gifts" the reports will be pretty skewed since the transactions happened in different months.

If I were to go back and reverse the transaction, would there be a better way to handle the whole thing to track it as more of a loan rather than a gift?

Thanks for any help!

Deanne

[JohnDMeyers]

I wouldn't call the reports "skewed" if you DB checking and CR the expense account, because it reflects what transactions took place, and that's what you want in your accounting system.

If the money given was truly intended as a "gift" and not an obligation or "loan", then it seems like the repayment of the money should be treated as a charitable gift or income to the donor (I'm not a CPA, however).

In other words, it may be appropriate to DB checking and CR an income account.

[bookkeeper-sheila]

Our church has an elders fund for just such a thing, and payments out are treated as an expense against budget, with no expectation of repayment. Then, if the needy person repays the "gift", then I show it as a gift to the elders fund (through contributions), and it offsets the expense; or frees back up the alloted budget. So in your case, I would treat the repayment as a donation to "gifts" through contributions (which will eventually increase the checking account). If you posted it as a separate deposit into fund accounting, then you could use the description fields to explain what expense it was offsetting or something. Am I making sense?

[gospeltab]

Both comments make sense. Thank you so much for the advice!

Deanne