how to tie income/expense to equity?

[Spindle]

I am relatively new to quickbooks, and do not understand much about accounting jargon. This is my first post after my introductory post.

I am the treasurer of a church charity and need to generate various reports

We have two types of equity in addition to general funds. The 'building fund' holds cash donated by parishoners specifically towards buying our own church. The 'Luton fund' holds cash specifically for our fledgeling sister church in Luton.

My problem is this: I wish to create special types of Income and Expense which are tied to the Building Fund, say BFIncome and BFExpense, and the same for the Luton Fund: LFIncome and LFExpense.

Other types of income/expense will affect our general funds.

In this way I will be able to generate Balance Sheet and P&L annual reports which will show the total money in each of the two funds, and the amounts coming into and going out of each of these funds each year.

I simply don't know how to tie income/expense to a particular equity in this way.

We have thousands of transactions already so I hope the solution doesn't involve me having to edit hundreds of existing transactions.

PLEASE HELP ME!

Thanks, Spindle.

[Spindle]

BTW: We use Quickbooks Pro 2006.

[Joe Williams]

The accounts for the "Building Fund" and the "Luton Fund" should be Long Term Liability type accounts. The will not show on the P&L but will show on the Balance Sheet reports.
The donations from the parishioners for these funds and expenditure for them should use these liability accounts. There is no Income or Expenses, just increase and decrease of liabilities.

[Spindle]

Many thanks indeed Joe. It didn't cross my mind that they don't belong on P&L as income/expenses.
It works quite well leaving both those funds as 'equity'. Same result: Show up on the balance sheet but not on the P&L.

[Spindle]

Dear Joe,

That looks fine on the balance sheet, but as you said money coming into/going out of the Building Fund and the Luton fund do not show up on the P&L report at all.

This means that income minus expenses shown on the P&L is less than the amount of money actually coming in to our bank account.

Surely money in/out of the two funds should show up somehow on the P&L but under a different category?

Please explain this in detail to me. Thanks for your time Joe,
Simon.

[Joe Williams]

No it should not. Think of the two funds as a fund that you are putting into (saving) and paying out (using).
The MONEY that comes into the company for them will show as an increase in the bank account but not as Income. When you use the money payed into them it is MONEY out of the bank account but NOT an Expense.

Using the Building Fund as an example.
When you receive money for the Building Fund the bank account increases by that amount and so does the Building Fund. When you actually start the building the money will come out of the bank account and the Building Fund to build the building. There is no income or expense for the church, just money flow.
You may want to show them the balance sheet report so they can see the balances in the Building Fund and the Luton fund.

[Spindle]

That is excellent, I am totally with it now. I've done it exactly as you said.

Many thanks Joe,
Spindle.