This post was last updated on December 10th, 2019 at 04:52 pm.
In Part One of this series, we learned that a fund transfer represents a reallocation of liquid assets from one fund to another. We also learned about the four main situations in which funds transfer money, and how to record a fund transfer in IconCMO. In Part Two, we turn our attention to account transfers and how a transaction for this type of transfer can be created or modified.
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Account Transfers
An account transfer is the process of changing the allocation of dollars to an alternate account. In IconCMO, journal entries can be created in GENERAL-LEDGER : GL : Journal Entries. They can be modified in GENERAL-LEDGER : GL : GL-Register.
Transfers From Savings to Checking
An example of an account transfer might be the transfer of money from the church’s savings account to its checking account. However the money stays within the same fund. In this example the money stays in the General Fund, and only the asset accounts — checking and saving is changed.
Creating the Journal Entry
To create the new journal entry, we’ll go to GENERAL-LEDGER : GL : Journal Entries. As we create the necessary entries for this transaction, keep in mind that the first three fields, General Journal Memo, Transaction Date, and Fund are entered once for an entire journal transaction. Whatever these three fields contain prior to posting is what will be used for the entire transaction.
In this example, we’ll enter “Transfer to checking” in the General Journal Memo field, the appropriate date in the Transaction Date field (NOTE: clicking on the box for the Transaction Date will pop the calendar tool) and select “General Fund” for the Fund. For the credit side of the transaction, we’ll select an Account Type of “Assets”, select “Savings” for the account, enter the credit amount of the transfer and verify/change the Line Item Memo. Once the data entry for this part of the transaction is complete, then click the Save button. This will add the information to the journal entry listing area in the lower portion of the window, as seen in Figure 1.
The debit side of the transaction is very similar, except this time we choose the checking account as the account and enter the debit amount. After clicking the Save button, the entry is added to the journal entry listing area, as seen in Figure 2. Once you’ve verified the entries as being correct, clicking the Post Entry button will post the transaction to the General Ledger.
Changing the Account Assignment
An example of modifying a transaction to allocate dollars to a different account might be to designate a different expense account from the one used in the original transaction. Let’s say that Church ABC issued a check, and the transaction debited an expense account called “General Building Maintenance.” Later on the church council decides that was the wrong expense account to use. They want it changed from “General Building Maintenance ” to “General Grounds Maintenance “. The original transaction entry is shown in Figure 3.
Identifying the Transaction
The change needed can be easily made by noting two specific pieces of information, the Journal Type and the Journal Number. In this case, the Journal Type is “Check” and the Journal Number is “12.” Using this information, we can go into GENERAL-LEDGER : GL : GL-Register and make the necessary changes. Once in the GL Register, we can set the “Transaction Type” to “Check” and the journal number in the “Jrnl No.” box in the lower-left area to “12.” Clicking the Find button searches all transaction and displays the transaction sa the first record, as seen in Figure 4.
Editing the Transaction
Next, click on the transaction date of the journal entry to open the transaction. Once in the transaction, we can make the expense account correction by clicking the Change Account Assignment button in the lower-right area of the window.
Once the “Change Account Allocation” window is open, you will see two dropdowns. From the “Select an Account” dropdown, choose the account to transfer from (you should see it in the dropdown list). You will notice that the original dollar amount of the transaction appears in the “Original Amount” field automatically. In the “To Account” dropdown, select the expense account to reallocate dollars to. In the “Amount Reallocated” field, you can enter either the full amount or any partial amount of transaction dollars. In this case, we will reallocate the entire $50.
After you click the Save button, a confirmation message will pop up to let you know the transaction is complete. When you return to the transaction window, you’ll see the newly-created journal entries, along with the original entries. We have now reallocated the $50 expense from the “General Building Maintenance” expense account to the “General Grounds Maintenance” expense account.
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