Transfers from Trust funds to Operating Funds

jalabuda · Post by **jalabuda** » Tue Mar 31, 2009 5:22 pm

We have several Funds including a Trust Fund. The earnings from the Trust fund are transferred to the Operating Fund.

Should we treat the Trust Fund transfers as "Income from Trust Fund" in the Operating Fund? Would this be a 9000 series account?

Should we then treat the Trust Fund Transfers as "Transfers to Operating Fund" in Trust Fund? Would this be a 9000 series account?

JohnDMeyers · Post by **JohnDMeyers** » Tue Mar 31, 2009 6:23 pm

I will prefix this by saying you COULD use a transfer account. There are different ways to represent a transfer, and I'll leave it to a CPA to say how it SHOULD be done.

If the trust fund was Fund 02 and your general fund is Fund 01.

One goal would be that after the transfer is done, the net account transactions leave income showing in only one account, not both.

So one way this COULD be done is this:

When the interest appears in the Trust Fund:
DB 02-Trust Asset Account
CR 02-Trust Interest Income

To transfer the money to General Fund
DB 02-Trust Interest Income
CR 02-9000 Transfer Account

To receive the money in the General Fund
DB 01-General Fund Bank Account
CR 01-Income from Trust

This will zero-out the 02-Trust Interest Income and show the Income only in the 01-Trust Income Account

There are other solutions to this as well.

jalabuda · Post by **jalabuda** » Sat Apr 04, 2009 12:26 am

John:

Thank you, this would eliminate the acccounting for the duplication of interest income.

John Labuda