[Anonymous]

Hi I want to ask a non profit journal entry question.

Say someone donate 10k to an organization and restrict the money can only be used in a research program, and the organization use that money in that program. How to write this whole journal entry?

1 Dr cash

Cr contribution restricted

This is the first entry , then how to write the following entries?

Thank you

[Anonymous]

I think it is:

DR Contribution Unrestricted

CR Reclassification from Temp Restricted

DR Research Expense

CR Cash

Someone please correct me if I am wrong. Thanks.

[gaapHitter]

Chynablue, your first entry is incorrect.

CX0813 your initial entry is correct. This would increase the temp restricted net assets on the Statement of Activities.

There is actually two ways to move or release the restriction.

First you can make an entry from

DB- Temp Rest Net Assets

CR- Unrestricted Net Assets

Or most Non-Profits track their restrictions outside of their accounting software. So at the end of the year the presentation

on the Statement of Activities would be a release of restriction,negative number under the temp restricted column and then a positive number under the Unrestricted column to offset the expense.

I do a considerable amount of Non-Profit Audits a year, let me know if you need more help.

[Anonymous]

You're right! Thanks gaapHitter 🙂

[Author]

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