Funds Transfer/Deposit Across Months

USA Discussion in 'Technical Queries' started by JordanP, Jan 11, 2018.

  1. JordanP

    JordanP

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    We have an endowment that made investments gains in 2017. We decided to move a portion of the gains from the endowment account to our main operating account. A check was cut from the endowment account in 2017 but wasn't deposited into our main account until 2018. We would like the transfer recorded in 2017. I am having trouble wrapping my head around how to record the transfer in 2017, while showing the actual deposit in January for reconciliation purposes.

    Thanks in advance for any thoughts.
     
    JordanP, Jan 11, 2018
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  2. JordanP

    Drmdcpa VIP Member

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    You cannot have your cake and eat it too.

    The deposit in the operating account is either recorded in 2017 and becomes a deposit in transit in that account, or the check from the endowment account needs to be dated 2018.

    Since it is merely a transfer from one bank account to the other, the two transactions should be recorded in the same year.

    Alternatively you could create another bank account in your records, not at the bank. Transfer the check to the new in 2017. In 2018 transfer the money from the new account to the operating account. But this, IMO, would be highly inappropriate.
     
    Drmdcpa, Jan 11, 2018
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  3. JordanP

    JordanP

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    Sounds like it is as easy as identifying it as a deposit in transit and adding the amount to the bank statements cash balance at 12/31.

    My work around for this has always been invoicing in month A and receiving invoice pymt in month B. However, that approach doesn't work when transferring between accounts.

    Thanks Drmdcpa.
     
    JordanP, Jan 11, 2018
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