I’d double check with a CPA or legal advisor concerning the ‘earmarking’ of
donations if your organization takes them as tax-deductible in the U.S.
I could be wrong, and I may only be thinking of certain types of non-profits,
but my understanding is that tax-deductible donations to non-profits cannot be
earmarked by the donor.
If that’s the case, it would save you some accounting work.
> On May 18, 2017, at 10:03 AM, Anita Graves <anitagra...@mac.com> wrote:
> Dear All,
> I am the treasurer for a religious organization and we have contributions
> coming in that are earmarked for a certain purpose. I propose to enter these
> as separate Asset child accounts and then spend them in the corresponding
> expense account. Do I have that right?
> What do I do with ‘in-kind’ contributions? No cash changes hands but it is
> the same difference, so do I debit the cash income account and credit the
> expense account?
> Thanks for helping, everyone.
>> Exactly—the bank shows our actual lump asset, but we care about the movement
>> of these ‘earmarked’ funds and keep them in our reports, so we know at a
>> glance how much spendable money in the bank we actually have, as opposed to
>> what the bank statment gives as our balance.
>>> On 18 May 2017, at 5:49 PM, Maf. King <m...@chilwell.net> wrote:
>>> On Thursday, 18 May 2017 15:39:59 BST you wrote:
>>>> Maf, I forgot to mention an important thing: I am not moving money from
>>>> bank, I am keeping it in the GC account tree along with cash, current,
>>>> savings accounts, so one would only know about these funds that are set
>>>> aside by looking at the GC accounts, not by looking at the bank statement.
>>>> It initially comes in as a contribution, and so I would put the
>>>> contribution in the asset subaccount, as an earmarked account, and then
>>>> spend that balance down to zero in the expense account. Is that right?
>>> Yes. your GC bank account can have sub-accounts - virtual "pots" of money
>>> that only show up if you look at GC. The bank thinks you have 1 "big"
>>> account, you think in terms of several mini accounts within the main bank
>>> account that keep your reserved totals easy to find...
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