Pass Through Contributions

[nbccji]

I'm not sure if i should ask this in accounting or contributions....

Our church is hosting a craft fair and i created a pass thru account for deposits to hold tables..... someone that made a deposit can't make it and needed a refund so i issued a check out of the expense account created in the accounting module but it occurred to me that maybe i should have instead entered a negative amount in contributions, a transaction like a return check.

Any suggestions?

Thanks, Katie

[NeilZ]

[quote="nbcc849"]I'm not sure if i should ask this in accounting or contributions....

Our church is hosting a craft fair and i created a pass thru account for deposits to hold tables..... someone that made a deposit can't make it and needed a refund so i issued a check out of the expense account created in the accounting module but it occurred to me that maybe i should have instead entered a negative amount in contributions, a transaction like a return check.

Any suggestions?

Thanks, Katie[/quote

You said you setup a 'Pass Thru' in contributions, it should have been setup so that the fund does not appear on any contribution statement. The person giving the deposit is getting something for their money, thus its not a deductible contribution. In this case, the Contribution Fund should have been setup with the credit (income) account pointing to a liability account, as this money is a liability on the church until the activity is over where it becomes income to the church, it is paid out to any organizers, or is refunded to someone who can no longer attend.

So, you should have actually used the liability account instead of the expense account for the refund. As far as doing anything in Contribution, definitely not.

[nbccji]

Thank you for replying ... i actually researched how to set up a pass thru account on the forum and followed the following instructions (that maybe i misunderstood):

(1st - create an income account to receive the youth money in Fund Accounting.
01-4180-000 camp income, for example.

2nd - in Contributions, create a contributions fund, like 180, for example.
Contributions / Setup / Maintain List of Contribution Funds / ADD
180
DB 01-1110-000 checking
CR 01-4180-000 camp income

3rd - uncheck the box on the General Tab that says "include fund on statements". This will keep the contribution from showing up on the parents' contribution statements.

4th - back in Fund Accounting, there should be an expense account already create for youth camping (if not, you can create 01-5180-000 youth camping, for example).

5th - budget off of the expense account. The contributions will go into the income account and not affect the budget.)

If you know of another way to set up a pass thru please explain and should i back out all of the transactions i've entered so far?

Appreciate it, katie

[NeilZ]

Thank you for replying ... i actually researched how to set up a pass thru account on the forum and followed the following instructions (that maybe i misunderstood):

(1st - create an income account to receive the youth money in Fund Accounting.
01-4180-000 camp income, for example.

<SNIP>

5th - budget off of the expense account. The contributions will go into the income account and not affect the budget.)

If you know of another way to set up a pass thru please explain and should i back out all of the transactions i've entered so far?

Appreciate it, katie

What I see here is not really a pass through, since you're crediting an INCOME account.

Here's what the Powerchurch manual says about Pass Through Contributions:

Code: Select all

Pass-Thru contributions are considered liabilities, because they are amounts that the church owes to other organizations. The typical transaction you would enter to record an amount received as a pass-thru is as follows:

Account           Account Description               Debit          Credit
01-1110-000    First Bank                              500.00 
01-2340-000    Special Offerings Pass-Thru                      500.00
 
This transaction increases the bank account by $500 and increases the Special Offerings liability account by $500 as well. Then, when the check is written to the college, an entry like the following would typically be used:

Account          Account Description                Debit          Credit
01-1110-000   First Bank                                                   500.00
01-2340-000   Special Offerings Pass-Thru   500.00

This transaction decreases the bank account by $500 and pays off the Special Offerings liability account as well.

The example you saw was for contributions that helped pay for camp tuition. The church would budget for the camp, and the income would then show up as part of the church offerings.

That said, if this is the way you are accounting for these deposits, then how you handled the refund is fine.

[nbccji]

Thank you so much! I somehow missed this in the manual...checked there first but didn't see it. Katie