Creating liability for separate funds

Question

Operating a not-for profit and will take deposits and make payments to members for a specific purpose in addition to everyday business - a section within the club if you like. How do I recognise that portion of funds held in the bank account as a liability ie: not part of the club funds without having to create a journal at the end of every month? My analogy would be sports section within a working mens' or cosmopolitan club.

kahunroleh · Answer

You can create a separate liability account within your accounting system specifically for the funds designated for that section (like a sports section).

This way, you can track it separately without needing to make journal entries each month.

Hope! this will be helpful.

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Creating liability for separate funds

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