Child Transactions in Parent Register

[John Morris]

Hi Michael,
  Thanks for the idea. I agree that this would be a way to do it, but Derek already pointed me to exactly what I needed. I just want to see all the child transactions in one place when I compare to the bank's online interface. (I don't bother "reconciling" against the statement because I'm signed in on the website at least a few times a week.) The rest of the time, I just want to see the general and costume funds as completely separate. This system works for me.

Best,
John

> On Jan 20, 2016, at 5:35 PM, Mike or Penny Novack <mpnovack at mtdata.com> wrote:
> 
> Your problem is in wanting to be able to deal with restricted or earmarked funds without having to do the necessary bookkeeping. It is your shortcut (having a simpler way to enter the transaction) that is causing the problem, so you want the program to "fix that" for you.
> 
> Look, I keep books for non-profits, this is a VERY common situation, restricted or earmarked funds. Let's ignore formally restricted funds for a moment (those use a liability account) and consider just informal earmarking.
> 
> 1) When the money dedicated to the special project comes in, create a child account under checking to hold it. But do NOT use the child the way that you are doing it.
> 2) When an expense comes in for which use of these restricted funds are appropriate, instead of a simple transaction
>      db  qualifying expense    $x
>             cr   checking                               $x
> 
>    You have a split transaction, split on both sides
>      db  qualifying expense     $x
>      db  checking                      $x
>               cr checking                               $x
>               cr earmarked fund                   $x
> 
>      It isn't SIMPLY db expense and cr earmarked fund because while those two against checking appear to just cancel each other out, you want them BECAUSE THE SECOND (the cr) records the check number and you want that entry in the ledger. If you find a two way split transaction confusing or hard to enter (not trivially easy) then you could enter as two consecutive transactions.
>       db  qualifying expense     $x
>               cr checking                               $x
> 
>       db  checking                      $x << like a deposit >>
>               cr earmarked fund                  $x << where the money for that "deposit" came from >>
> 
> 3) Perhaps the best way to set this up is to have a parent "checking" (the entire account) and under that a child "unrestricted funds" (where deposits will be made, from which checks will be written, what you reconcile EXCEPT for the total in the account you include all the other child accounts holding earmarked funds. That isn't really much extra work, because in reconciling a checking account you are always adding and subtracting (checks written but not deposited) so no big deal to also be adding the reserved amounts.
> 
> Michael D Novack