Increasing Net Asset Accounts from Income - Nonprofit

Equity is automatically calculated using the formula, total assets less total liabilites. Anytime anything changes in assets or liabilities total equity will change.

A Nonprofit should IMO use funding accounts. A bank account for the following
Operational
restricted (one for each kind of restriction)
unrestricted

All transactions happen in the operational account
then money is moved out of the operational account and into either a restriced account or an unrestricted account.
The same thing happens when you pay out money, transfer the funds to the operational account, then make the payment.

@dkfop08 

Unrestricted Net Assets functions like retained earnings.  At year-end, whatever net income (Change in Net Assets) you have for the year gets closed to Unrestricted Net Assets.  That is how that $1,000 unrestricted individual contribution may end up in Unrestricted Net Assets.  When you receive a donation with restrictions, that is posted directly to Restricted Net Assets.    

Is there a way to push that process through? I added some bank deposits to our checking account that went back to 1/1/21 but none of that income was moved into retained earnings or net assets.  How do you post directly to the equity account for that scenario to show the $1000 in an income account but also the restricted assets account?

@Rustler I've seen you post this response in several places, but those of us keeping books for a large nonprofits with many accounts, like endowments, checking, CDs:  this is just not feasible.  It is standard accounting practice with non-profits to use either equity or classes to manage restricted and unrestricted funds.  There is nothing wrong with using equity accounts.