QB nonprofit - accounting for prepaid grant income & expense


A

Abby

I apologize for bringing this subject up again - I'm really having
trouble figuring out how to enter these transactions to stay in balance
I am new to QB nonprofit and nonprofit accounting
here goes:
I receive a "pre-paid" grant
I enter donation as sales receipt which is a debit to the checking
account - what account do I charge to?
I have seen it suggested to increase/credit a liability account for
unearned grants,
but I would like to further increase/credit a net asset (equity)
account for program restricted grants
What is the balancing debit?

Then when I incur an expense associated with this grant
I increase/credit the checking account and debit /increase an expense
account
I decrease/debit the liability account
I need to decrease/debit the net asset account
I need to increase/credit an earned grant income account
It looks like I need another credit . . . ?

thanks in advance for advice
Abby Jordan
Southern Conservation Trust
 
O

OkieEddie

Subject: QB nonprofit - accounting for prepaid grant income & expense

From: Abby (e-mail address removed)
charset=us-ascii; format=flowed
I apologize for bringing this subject up again - I'm really having
trouble figuring out how to enter these transactions to stay in balance
I am new to QB nonprofit and nonprofit accounting
here goes:
I receive a "pre-paid" grant
I enter donation as sales receipt which is a debit to the checking
account - what account do I charge to?
I have seen it suggested to increase/credit a liability account for
unearned grants,
but I would like to further increase/credit a net asset (equity)
account for program restricted grants
What is the balancing debit?

Then when I incur an expense associated with this grant
I increase/credit the checking account and debit /increase an expense
account
I decrease/debit the liability account
I need to decrease/debit the net asset account
I need to increase/credit an earned grant income account
It looks like I need another credit . . . ?

thanks in advance for advice
Abby Jordan
Southern Conservation Trust
Abby,
Let me preface my remarks with "there are numerous ways to track your
nonprofit(s) in QB". The reports you require dictate how you set it up and the
transactions you use. The following is how I have done it for one of my
consulting clients which has several grants and had to report on and account
for each:
First, I set up a class for each grant, then, I set up a banking account and
called it All Grant Accounts. Then I set up a subaccount for each grant under
the bank account All Grant Accounts. When I receive money into that account,
it is just a deposit and it is a check or payment out of that account when that
is required. By doing this, you may instantly see what the balance of each
account is by looking at that particular bank subaccount.
For reporting purposes, make sure you have assigned each deposit and payment
to the respective class. Then, at any time you may do a P & L by Class report
and it will list your Grant as the column headings and underneath each will be
the income and expense associated with it. Now to report on individual grants,
say a monthly report of income or expenses, simply open that particular
register and go to File, Print Register, and specify your date range.
Furthermore, you may set up a budget by class and you can prepare that report
to compare what is spent to what is actually budgeted. (This budget report is
one my client really needed).
In closing my client just needed to track the income and expenditures of each
grant and to provide a budget report. And this way fit her specific needs.
Hope this helps you,

Eddie Watts
QuickBooks Consultant
 
Ad

Advertisements

Joined
May 12, 2013
Messages
3
Reaction score
0
Can anyone help me? I have a big problem working with grants and need serious help.

Can anyone help me in the accounting field?
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads


Top