Non Profit with Savings Accounts to hold Restricted Funds until they are unrestricted.
I have a nonprofit client who is using their savings account as a holding for money received. They would like to show this as Temporary Restricted Funds account on their Balance Sheet. She used a journal entry; but that is taking it out of savings and putting it in the equity account. How can the funds be moved into that equity account without moving it out of Savings? Is this possible? Or should the savings account be the Temporary Restricted Funds account?
Since the funds have been recorded in a savings account, the assumption is the funds have already been recognized as revenue on the income statement. This revenue has been or will be closed to the equity account on the balance sheet at year end. A journal entry can be used to reclassify from regular equity to a temporary restricted funds equity account.