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    nicolab's Avatar
    nicolab Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Aug 19, 2014, 08:58 PM
    Transferring savings
    I have recently been asked to look after the books temporily for a small not for profit sports club in Christchurch New Zealand.
    I noticed that they had entered transferring of money from the current account into a investment account (fixed term bank deposit) as an expense. This doesn't seem correct to me, but it has been along time since I studied book keeping at school.

    The majority of the savings come from an insurance payout, for earthquake damage to the building and grounds, which have been fixed, mostly with volunteer labour.

    How should this entry be managed.

    Cheers
    Nicola
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
    Ultra Member
    		  
    #2

    Aug 20, 2014, 02:24 AM
    Non profit activities
    What you have here is a misunderstanding of process probably not deliberate. A transfer of funds is exactly that; the change in the class of the asset from operational funds to investments

    As you have the proceeds of an insurance claim that is revenue, other income, but the transfer of funds is a separate issue.

    Contact me if you need more help
    K2Mookey's Avatar
    K2Mookey Posts: 8, Reputation: 1
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    #3

    Aug 28, 2014, 01:22 PM
    Yes, the transfer of funds is from one asset to another. There is no expense involved. The transaction for revenue has already been recorded and should not be changed.
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