Negative balance in designated funds

[SMSMART]

I have been using Powerchurch for approximately 2 years and I do not have an accounting background. We have a couple of designated funds with negative balances. Either the cost of the project was more than anticipated and/or a donation that was promised was not made. Our Pastor wants these accounts cleared out. We agreed to move the money from the general fund to cover these negative amounts. We only have one bank account but the money is divided into the general fund and designated funds. It is my understanding that we could write a check to ourselves taking the money from the 01 account, deposit that money to our account, and post the money to the 02 (designated) fund that has a negative balance. However, I was wondering if I could not simply do a journal entry? Thanks!

[JohnDMeyers]

First of all, I have been using PowerChurch for about 25 years, and I don't have an accounting background!

It'll grow on you after a while.

You can use the transfer accounts to make a journal entry.

I usually create the same transfer account number in each fund, so that they cancel out when you run a consolidated report.

Create:
01-9010-000 transfer to designated (closes to 01-3110-000 unrestricted)
02-9010-000 transfer from general (closes to 02-3110-000 unrestricted)

Move $500.00 from General Fund to Designated Fund:
CR 01-1110-000 checking $500.00
DB 01-9010-000 transfer to designated $500.00

DB 02-1110-000 checking $500.00
CR 02-9010-000 transfer from general $500.00

[SMSMART]

Thank you so much for your reply. I think maybe I need to give you a little more information. If I understand, the example you give would move the funds from the general funds to the designated funds. However, within the designated fund we have many different accounts and we want to be sure the particular fund that has a negative balance is zeroed out.

This is what I originally thought I could do .....

01-1110-000 General operating fund CR 500.00
01-5251-000 General maintenance fund DB 500.00

02-1110-200 Designated Funds DB 500.00
02-4233-233 Upgrade Nursery Fund - Income CR 500.00

What I had hoped to do was to take the negative balance in the upgrade nursery fund and zero it out. This would take the money to pay it off out of the general maintenance fund.

Does this make sense and would it work?

Thanks again

[JohnDMeyers]

The way you have it laid out will work. It is totally appropriate for your situation, and it will add $500 to your Upgraded Nursery Fund, which will total zero.

The only other consideration is if this is a temporarily restricted income account.

If it closes to 01-3110-000, it is unrestricted.

If it closes to some other number, like 01-3233-000, then it temporarily restricted.

If it is temporarily restricted, you can add this transaction to clear the restriction (I don't know the actual account numbers)
DB 01-4833-00 Upgraded Nursery release $500.00
CR 01-4999-000 General Release $500.00

[SMSMART]

Just wanted to say thank you to Mr. Meyers for responding to my posts. I am sure as I continue to work on PowerChurch and come across different situations that I will have more questions to post. Thanks again for your help!