I have inherited a chart of accounts that was set up long ago. Can anyone explain to me what the difference between Fund Balance and Excess Income/Expense is? And which accounts should close to Fund Balance and which to Excess inc/Exp?
Thank you,
Kathy
Fund Balance vs. Excess Income/Expense
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Re: Fund Balance vs. Excess Income/Expense
Are you talking about how they are calculated on reports ?nccchurch wrote:I have inherited a chart of accounts that was set up long ago. Can anyone explain to me what the difference between Fund Balance and Excess Income/Expense is? And which accounts should close to Fund Balance and which to Excess inc/Exp?
Thank you,
Kathy
Neil Zampella
Using PC+ since 1999.
Using PC+ since 1999.
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nccchurch
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Re: Fund Balance vs. Excess Income/Expense
Yes,
are these system generated? Should I just have one or the other on my balance sheet, or both?
How do I decide what accounts close to one or the other?
are these system generated? Should I just have one or the other on my balance sheet, or both?
How do I decide what accounts close to one or the other?
Re: Fund Balance vs. Excess Income/Expense
Take all of your income for some period and subtract all of your expenses and the total is called Excess Income over Expense or Excess Income/ Expense. So this is just a calculation.
All income and expense must close to an equity (fund balance, net asset, different terminology but it all refers to a 3000 number) account. Income and expense are periodic accounts that measure activity over some period of time like a fiscal year. At the end of that fiscal year, income and expense accounts zero out but the equity (3000 accounts) carry the difference of the income - expenses into the next year. What 3000 account each one of your income and expense close to is up to you. The program will set up a generic unrestricted net asset (unrestricted equity, unrestricted fund balance, whatever you call it) and this is typically where the program will try to close out all income and expense unless you tell it otherwise.
So in the case where you want to track a particular department for instance, you might create a special 3000 account, let's use 3210 and call it Sunday School (it could be called whatever you want) and all income and expense related to Sunday School would close to the 3210. Then when you look at the 3210, you would know how much money is left.
Hope this helps.
All income and expense must close to an equity (fund balance, net asset, different terminology but it all refers to a 3000 number) account. Income and expense are periodic accounts that measure activity over some period of time like a fiscal year. At the end of that fiscal year, income and expense accounts zero out but the equity (3000 accounts) carry the difference of the income - expenses into the next year. What 3000 account each one of your income and expense close to is up to you. The program will set up a generic unrestricted net asset (unrestricted equity, unrestricted fund balance, whatever you call it) and this is typically where the program will try to close out all income and expense unless you tell it otherwise.
So in the case where you want to track a particular department for instance, you might create a special 3000 account, let's use 3210 and call it Sunday School (it could be called whatever you want) and all income and expense related to Sunday School would close to the 3210. Then when you look at the 3210, you would know how much money is left.
Hope this helps.
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Zorak
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Re: Fund Balance vs. Excess Income/Expense
Versions 8.5 and prior of PowerChurch Plus had two equity accounts.
3001-000 Fund Balance
3002-000 Excess Income/Expenses
These were maintained automatically in the program as you closed months/years. Each month, the actual difference between income and expenses was adjusted into the 3002 account when you closed the month. At the end of the year, the balance from 3002 was moved into 3001 when you closed the year.
This setup was done away with in Version 9 of PowerChurch Plus when Fund Accounting was redesigned. If you are in Version 9 or newer, then the 3002 account was converted forward because either transactions had been entered directly against it in the past, or a beginning balance had been set up on it.
At this point, in Versions 9 and newer, you can adjust the balance down to zero and mark that 3002 account inactive to get it off the books.
3001-000 Fund Balance
3002-000 Excess Income/Expenses
These were maintained automatically in the program as you closed months/years. Each month, the actual difference between income and expenses was adjusted into the 3002 account when you closed the month. At the end of the year, the balance from 3002 was moved into 3001 when you closed the year.
This setup was done away with in Version 9 of PowerChurch Plus when Fund Accounting was redesigned. If you are in Version 9 or newer, then the 3002 account was converted forward because either transactions had been entered directly against it in the past, or a beginning balance had been set up on it.
At this point, in Versions 9 and newer, you can adjust the balance down to zero and mark that 3002 account inactive to get it off the books.
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nccchurch
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- Location: North Cincinnati Community Church
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Re: Fund Balance vs. Excess Income/Expense
Zorak - thank you for your explanation - I followed your instructions and that solves my confusion!
And Zaina - thank you for the clear explanation of 3000 accounts.
And Zaina - thank you for the clear explanation of 3000 accounts.