Transferring monies between funds - 4 line transaction?
Posted: Thu Nov 20, 2003 8:51 pm
A question on your instructions for transferring money between funds: do you "always" have to use a four-line transaction (asset transfer and income transfer).
This is my situation. We started a new church on Jan. 1 which was a merger of two churches. We started our accounting by creating asset transfer accounts (3001 under fund balance) to bring in assets from the two original churches without reporting these amounts as income. They were already reported as income in the old churches. By default this money went into the general fund.
Later in the year we decided to move $10,000 which came from the old churches from the general fund to the building fund. Here is my problem: if I enter this as an asset transfer AND an income transfer (4 lines) it shows up as a $10K deficit in the bottom line of the income over expenses statement for the general fund. If our actual deficit is $2K (during the year we've spent $2K more than we've taken in) it shows up as a $12K deficit. But that extra $10K was not income to start out with. It seems our deficit is $10,000 more than it really is.
Of course the building fund shows $10K more income than it really took in. The consolidated reports are OK of course. Regrettably my knowledge of accounting is very limited, but this seems counterintuitive to me. Do you really have to include an income transfer transaction when you transfer between funds even when the amount transferred is not income (at least not this year, and not for this church)?
This is my situation. We started a new church on Jan. 1 which was a merger of two churches. We started our accounting by creating asset transfer accounts (3001 under fund balance) to bring in assets from the two original churches without reporting these amounts as income. They were already reported as income in the old churches. By default this money went into the general fund.
Later in the year we decided to move $10,000 which came from the old churches from the general fund to the building fund. Here is my problem: if I enter this as an asset transfer AND an income transfer (4 lines) it shows up as a $10K deficit in the bottom line of the income over expenses statement for the general fund. If our actual deficit is $2K (during the year we've spent $2K more than we've taken in) it shows up as a $12K deficit. But that extra $10K was not income to start out with. It seems our deficit is $10,000 more than it really is.
Of course the building fund shows $10K more income than it really took in. The consolidated reports are OK of course. Regrettably my knowledge of accounting is very limited, but this seems counterintuitive to me. Do you really have to include an income transfer transaction when you transfer between funds even when the amount transferred is not income (at least not this year, and not for this church)?