Discussion:Non profit fund accounting
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Discussion Forum Index --> Accounting Questions --> Non profit fund accounting
| 9 August 2009 | |
| I understand that funds fall into 3 categories, unrestricted, temp restricted and restricted. I treat them as equity acounts.
So if I have cash donated to a fund I dr cash cr equity account. Now the money goes to an investment company so I cr cash and dr investments. Then when the money is spent I cr invenstment funds and dr the equity account and cr income and dr the expense Am I missing something in this process | |
| 9 August 2009 | |
| When cash is donated you debit cash and credit income. When you spend the money you debit expense and credit cash. Net income closes to the net asset categories. | |
| 10 August 2009 | |
| Fund accounting...if the money went into the "fund" restricted then you need to reduce the amount in the "fund". Temp restricted funds can spend the original cash in the bank, permanently, you hold it but the earnings from the cash can be spent.
No expensing if spent out of restricted funds Neil | |
| August 11, 2009 | |
| Welcome back, Sandy.
I think first the terminology needs to be clarified. "Fund" accounting is what nonprofit organizations used before SFAS 116 and 117 came out. Rather than three "funds," we now have three types of net assets, the last one being permanently restricted net assets. I would add to Rkr's and Sandy's posts that in addition to recording the income and expenses, you may need to adjust the net assets. So, let's say someone donated money to the cancer society for a special education program -- debit cash, credit donations income and debit unrestricted net assets and credit temporarily restricted net assets. When the PSAs that satisfy the restriction are produced, you would debit expense, credit cash and debit temporarily restricted net assets, credit unrestricted net assets. | |
| 11 August 2009 | |
| Correct Natalie....thank you for the welcome back :)
There are (2) separate entries needed, but indeed when you spend the money, you need to account not as against the general fund. I think we agree :) | |
