Scout Troop Account Structure & Invoice Procedure for Dues

[Frank Santoro]

The accountant will now speak. :)


Joshua Sanders wrote
> My son's scout troop is trying to adopt GNUcash to keep track of their
> books. I'm having trouble figuring out how to get some of the basic chart
> of accounts setup to track dues. I have the following for my accounts.
> These accounts are basically self explanatory but the 2100 account is
> setup as a liability account. We hold $$$ in trust for boys and then use
> those funds as membership assessments are....assessed, camp fees are
> demanded, etc.
> 
> 1010 - Checking Account
> 1100 - Accounts Receivable
> 2100 - Scout Account - Nick
> 4010 - Individual contributions

So far so good, except one question - do you get contributions from
individuals that are more akin to charitable gifts (i.e., no goods or
services expected in return)? That's what comes to this accountant's mind
when I think "contributions" in a non-profit setting. You might want to call
your 4010 account something different like Assessments. You could get
creative and have sub-accounts under that, if the troop cares to track which
assessments/goods/services the scout families purchase.


Joshua Sanders wrote
> I was running through paying dues for this kid and came up with the
> following steps.
> 1. Kid's parents turn in check for $25 to put $$$ in scout account. Debit
> $25 4010 & Credit $25 in 2100

Nope. You got $25 in cash (increase in assets) but haven't earned it yet, so
this is unearned revenue, which is a liability (increase in liabilities). So
debit $25 to 1010 and credit $25 to 2100. The accounting equation stays in
balance.


Joshua Sanders wrote
> 2. Treasurer creates an invoice and posts it for Membership Assessment.
> Assessment is $24 (parent overpaid by $1). Income account is Scout Account
> and Posted Account is A/R

If you were doing this on paper or just in a spreadsheet, I would say
there's no need to use A/R.  A/R is when someone owes you - you earned
revenue (increase in equity) but haven't been paid yet so you set up an A/R
(increase in assets). But in your scenario, I can see setting up the invoice
to automatically put the balance in A/R, then paying it down using the
deposit on hand, if you're using the GnuCash invoice and payment functions.
OK, so the troop has earned income (increase in equity). The other side is
A/R (increase in assets).  Debit 1100 for $24, credit 4010 for $24.
Everything still in balance.


Joshua Sanders wrote
> 3. Treasurer then proceeds to immediately pay for invoice by processing
> payment. Payment is $24. Transfer account is Checking Account and Post to
> Account is A/R.

Again, no. No reason to hit the checking account, the cash is already there.
Instead, you're drawing from the available customer deposit (decrease in
liabilities) to pay off the A/R (decrease in assets). Debit 2100 for $24,
credit 1100 for $24.

At the end of the day, You should have:
Cash (1000) = $25
Scout Account (2100) = $1
Assessments (4010) = $24

Everything balances. I've attached a picture of the accounting equation here
as well as the activity in the individual accounts.

<http://gnucash.1415818.n4.nabble.com/file/n4684183/Screenshot_2016-04-08_12-03-25.png> 



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