Restriction & Pass Thru accts.

ChrisG · Post by **ChrisG** » Thu Apr 20, 2006 11:53 am

I've been using PC+ for many years, but just recently updated to the 9V.
I haven't figured out how to use the restriction and pass thru accts.
I have a question. We just opened a savings account to be used only if our income doesn't cover payroll during a period. I'm not sure how to put this in the PC+. Do I make it a restricted account? How do I do that?
Or should I make it a transfer account?
I need to add interest to it each month also, so it will have to be some kind of income account, though that will probably be the only addition to it.
Chris

Matt · Post by **Matt** » Thu Apr 20, 2006 9:27 pm

I would suggest setting up an asset account in your chart of accounts for your savings account if you do not already have one. I do not think you need to set up restricted accounts for this. If you set the savings account up in the same fund that has your checking account for payroll it will be quite simple to record transfers from savings to checking when needed. Also set up an income account for the interest earned if you don't already have an account set up.

Post by **Jeff** » Sat Apr 22, 2006 1:53 pm

Matt is correct on how to handle this, but I wanted to chime in here with some more information because this matter of what is to be considered restricted has come up in other places as well.

There is a difference between restricted money and designated money. Basically only donors can restrict money, ie the money is given for a specific purpose. Those monies are considered restricted and can only be used for their restricted purpose. These restricted balances need to be shown on the balance sheet so you know that you have money that can only be used for specific purposes and not be used to cover other expenses.

Boards or governing bodies can designate money for specific purposes. The money is not considered "restricted" though because the board could reverse itself and undesignate the money so it is not shown as a restricted balance in your equity section.

RLM · Post by **RLM** » Sat Jul 05, 2008 2:17 pm

Is there a way to 'track' designated income so that it shows up on a balance sheet or other report?

Case : A bake sale was held to generate revenue for a youth Sunday school class called "King's Kids". The organizer of the bake sale wanted the income funds 'designated' for future youth use to decorate their Sunday school room.