A fund's beginning balance is the total amount of money available to
spend for the purpose of that fund. It does not necessarily correspond to a
bank account balance, because you may have one fund's money split among two
or more bank accounts. This section deals with fund balances regardless of how
many bank accounts actually contain the money.
Determine the correct fund balances before proceeding.
Be sure to include in each fund's balance any
accounts receivable or payable for that fund. Accounts receivable increase the
fund's balance, and accounts payable decrease the balance.
To do this task
Set up your actual bank accounts with the correct beginning balances for
those accounts in QuickBooks. See
Calculate the beginning balances for all your funds.
The total amount must equal the amount you have in your bank accounts plus
any outstanding accounts payable or accounts receivable for all funds.
Create a QuickBooks income account called Fund Transfer Income and create
an expense account called Fund Transfer Expense.
These accounts are used only in general journal entries to enter or adjust
fund balances and they always cancel each other out.
Go to the Company menu and click Make General Journal Entries.
In the Make General Journal Entries window, make sure that you have
assigned a class to each fund
you want to track.
Click the Account drop-down list and choose the Fund Transfer Income account,
enter the total for the first fund under Credit, and select the fund under
Repeat for each fund you have.
After you've entered the last fund balance, press Tab. You'll see a
balancing entry on the next line under Debit, equal to the total for all your
funds entered in the Credit column.
Choose the Fund Transfer Expense account on the last line (where you see the
balancing entry under Debit).
Do not select a class on this line.
To check your beginning balance entry, create a Custom summary report. See
Checking your fund balances