ACCOUNTING practice question

Beth Leonard beth at
Sun May 20 16:28:12 EDT 2007

On Sun, May 20, 2007 at 11:35:39AM -0800, Lewis Overton wrote:
> Suppose I get $100 from MaryJane for jazz music. I record this:
> Debit bank account $100
> Credit contributions:direct:from individuals $100
> Now it seems I need to move something around to separate this $100 from
> general funds. Here is where I'm confused. I still need to reconcile with
> the bank. Can I somehow divide the cash asset between unrestricted and
> use-unrestricted and still reconcile? This seems intuitively reasonable, but
> what does my intuition know about accounting? :-/
> Or do I create something else somewhere to do the tracking?
> My experience is very limited and training is very old (read forgotten).
> Local help is minimal here. That's why I'm asking here. I hope I'm not
> stretching the forum too much by asking for this kind of help.

You can seperate your one physical bank account with the bank
into 2 (or more) logical book-entry bank accounts in Gnucash.  Click
on the bank account and then click on "new" to make a new account
with your bank account as the parent.  Call the new account
"Jazz restricted funds" or something similar.  Now go to that $100
transaction in the contributions:direct:from individuals
account and change the transfer account from "Bank account" to
"Bank account:Jazz restricted funds".

When you reconcile with the bank statement click on the checkbox
that says "include sub-accounts" and you'll still be able to
reconcile all the transactions into and out of the Jazz restricted

In this way the $100 asset is still in your physical bank account,
but you keep track of it as being restricted for use by the Jazz
band.  Depending on your needs, you may wish to make a hierarchy
like this:

  -> Current assets
  -> -> Bank Account Placeholder (contains no transactions)
  -> -> -> Unrestricted funds (most transactions go here)
  -> -> -> Jazz restricted funds
  -> -> -> Other restricted funds

This way in the account summary page you can easily see how much you
have in your bank account (so you don't bounce checks) and how much
money is available for general use, as well as how much is in
various restricted accounts.

When you balance (reconcile) the checkbook with the bank statement,
choose "reconcile" from the Bank Account Placeholder and check the
"include subaccounts" checkbox.

If you already have a bunch of transactions in the Bank Account account,
you can use creative renaming/re-parenting to make the hierarchy above.
Choose "edit" from the accounts tab.
Beth Leonard

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