On 7/21/2020 9:18 AM, Joshua Ginsberg wrote:
We have a single bank account. This year we received a cash loan and a
grant. Both of them require us to track what expenses the funds
specifically went to pay for. I'm unclear of how to best set this up in
GnuCash.
For grants that don't require tracking, we just co-mingle the funds in our
bank account general funds, but this grant's funds will be actually in our
bank account but expenses using those specific funds needs to be tracked.
For loans that don't require tracking, I know to create a liability account
for the loan and begin it with a transaction between the loan and the bank
account.
But it feels like I need some other account to track the remaining balance
on the funds from the loan/grant.
I can tell you how I did this (bookkeeping for non-profits)
Let's take the grant first. You create a liability for this and an
income account "grant income". This latter is used when the money
becomes yours (has been used for an expense authorized by the terms of
the grant).
When you get the grant, debit the bank account and credit the liability.
That grant money is not yours yet even though in your bank account. The
organizations hasn't "earned" it yet.
The transactions recording qualified expenses now become more
complicated. You debit the expense AND the liability (cancelling that
much) and you credit the bank account (check used for that expense) AND
"grant income" (that much now "earned")
For me to tell you how to handle the loan you'll need to supply more
details. But if this is a loan where the amounts used for the specified
purpose are forgiven (one of the possibilities) it's just like that
grant. Otherwise you need to explain in what sense the loan is
associated to specific expenses.
Michael D Novack
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