We received a cheque just over 14 days ago as an interim payment from a legacy left to my organisation.
With the current Covid 19 situation this was retained as cash in hand until very recently when it was paid into a general, non-specific use, bank account. I would like to assign an appropriate account but:
A. Can’t see anything in the standard chart of accounts.
B. Any attempt to add an account under the six groupings with the associated categories does not seem to provide an adequate identification.
I note the standard ‘Donations’ account but the i flyout implies donations MADE not donations RECEIVED.
Initially I would say this would be classed as standard income and treated as such, so the Sales
category seems the most appropriate.
However, I’m not an accountant, so it may be best to get advice on this to ensure it’s recorded correctly.
Traditionally, for small value amounts we would have recorded them as non-taxable income. As a beneficiary of a will we believe this also to be non-taxable in the trading account context.
Lets await the accountants input.
Are you a profit making or non profit making organisation? There’s various ways it should be recorded but without more information I wouldnt like to advise.
But generally you would Dr an asset nominal and Cr something like contributions or revenue contributions
We are a non-profit organisation/Society registered as a limited company.
OK great. So another question would be was the legacy left to be used for any specific reason? If the answer is yes then create a capital nominal and name it something that represents the reason for the donation ie “building maintenance fund” if the answer is no you can just use a capital account nominal to credit.
The debit side would be something like cash or bank.
But please ask your own accountant if you have one as he/she may want you to tag it to a particular nominal and its always best to go with the advise from the agent who deals with your books.