I am our PTA treasurer. We sell pre-made school supply bags to our students as a fundraiser. The window to order these supply bags, and therefore revenue received, happens in one fiscal year. The majority of the supplies are paid for & the product delivered to the student in the next fiscal year. In the past we've just dealt with our revenue/budget looking weird because the revenue was booked in the fiscal year received and the payments made in next fiscal year. No adjusting entries were ever made. We are on a cash basis and operate a P&L Budget sheet. I would love to fix this issue but not exactly sure what the best way to do it would be.
Should I book the monies received for the supply bags in previous fiscal year to a BS liability account as designated funds for the supply bags? Then on 7/1 (new fiscal year) make a JE to move these funds from the BS liab account to the IS revenue account?
If this would be the proper way to do it - here is another question: The previous treasurer booked all the income (as it came in) last fiscal year to the IS account for school supply revenue. So, right now it is showing these funds are revenue for last fiscal year. Should I make a JE on 6/30 to move these received funds to the BS designated funds liab account and then on 7/1 make the entry to move it back to the IS revenue account.
I'm thinking this would be the cleanest way to do it but want to make sure before I make the entries.
Thanks for any advice you have.
