Do I ReeeeeALY need to use sub accounts?

[LindaW]

Sooooo do I really need to use sub accounts in PC?

The reason I ask is because I could get an accurate balance of a certain line item in the CHART OF ACCOUNTS if I did not use sub accounts and reports would be cleaner.

EXAMPLE:
01-5410-101 for expenses
and
01-6410-101 for income
(sub account 101)

I would like to use 01-5410-000 for expenses and income.

Thanks

[JohnDMeyers]

First, I don't think you can use 6401 for income, unless you changed your default settings. Income is usually in the 4000s.

Subaccounts just give you more room in your chart-of-accounts. Used with Groups and Levels, you can create easy-to-read reports.

For example, book expenses:
4. SUNDAY SCHOOL BOOKS 01-5410-000 Group
>>>5. Adult Sunday School 01-5410-001 detail
>>>5. Junior Church 01-5410-002 detail
>>>5. Marriage Seminar 01-5410-003 detail
4. BOOK TABLE BOOKS 01-5412-000 GROUP
>>>5. Bible Study 01-5412-001 detail
>>>5. Marriage 01-5412-002 detail
>>>5. Finances 01-5412-003 detail

The point is, with sub-accounts, it is easy to add to the list without painting yourself into a corner with the Chart-of-Accounts. I could easily add twenty more categories to each list without worrying about where I am in the Chart-of-Accounts.

[Zorak]

Using sub-accounts also allows you to report on otherwise unrelated accounts... If you have an asset that ends in -101 and also liability, income, and expense account that ends with -101, you can run reports selecting just on the -101 to show all related transactions or balances.

To answer your question, you do not have to use them at all.

[Jeff]

I would like to use 01-5410-000 for expenses and income.

Just making sure. Do you want to track a balance in the 01-5410-000 account using it both for income & expenses?

[JohnDMeyers]

No.

Income is tracked in the 4000s accounts.
Expenses are tracked, usually 5000-8000s.

In order to see both income and expenses, as Zorak pointed out, use sub-accounts and run reports that filter on those sub accounts.

For example, Fund Accounting / Reports / Income and Expense Report

Range of accounts: 4000 5000
Range of Funds 01 01
Sub accounts 104 104

This would report on this:

01-4090-104 Income for special purpose
01-5410-104 Expense for special purpose

[Jeff]

Thanks John for the reply. I wanted to make sure that the original poster was not trying to use just an income or expense account to track the balance. This is something tech support sees fairly often.

People will try to use an income account to track a balance. They credit it when they receive money (debit bank) and then debit the income account (credit bank) when they spend money. This will work for the first accounting year. Then they get upset when the balance doesn't carry to the next accounting year.

To me it sounded like they wanted to just use one account to track both the income and expenses.

[JohnDMeyers]

Jeff:

I thought you were the original poster.

[LindaW]

I am the original poster...

What I wanted to do was to be able to look at a line item in the chart of accounts to get a budget balance for that line item.
You know... following this path...
ACCOUNTING
FUND ACCOUNTING
MAINTAIN CHART OF ACCOUNTS
LOCATE MY ACCOUNT # (let's say Youth Ministry Exp. 01-5420-101)
CLICK "DETAILS"
CLICK ON "ACTIVITY"
This is where I am not seeing a true balance. I'm only seeing the debts.

If I take away the sub account "101" and just use the one line item "5420" for income and expense it gives me a true account of what is left in that line item for the year.

Did I set something up incorrectly?

[Jeff]

Not knowing exactly what you are trying to accomplish, I can only talk in generalities. The purpose of income and expense accounts is not to track a balance like you mean it. An income account is to track how much money has come in during a period and an expense account is to track how much was spent during a period.

For example, if I wanted to know how much was received for interest income, I would go to the interest income account. If I wanted to know how much was spent on electricity I would go to the electricity expense account.

Income and Expense accounts do not carry their balances from one accounting year to the next. When your year closes, the balance of income and expense accounts close to an equity account. If you are trying to carry a balance in an income and expense account, it will not carry forward when your year closes.

If you are trying to carry a balance you need to use an account that shows on the balance sheet report. Balance Sheet accounts carry their balance forward from one year to the next. What type of balance sheet to use depends on nature of the amount and how you want it to show on the reports.

[Jeff]

Adding to your post, if you put income and expenses into one account, you will never be able to see how much money has been spent on Youth Ministry because you have combined the income and expenses together. If this is a budgeted account, it will not show as expected.

[tborgal]

Just a thought and question here. Are you talking about income that was received to offset expenses, such as a youth retreat that must be paid for in advance and the youth then give money for there own cost? If this is the case putting that income back in to the expense account is fine and gives you a true picture of what the actual expense to the church was. I do this frequently.