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Level 1

Recording a donated fixed asset in desktop

I am using the Non Profit version of QB Desktop and am trying to record a fixed asset donation.

I attempted to follow the instructions found in this forum, which may be for on line, and have run into the following problems.

In creating the sales receipt, I am unable to choose "deposit to" as I can't find it in desktop.

Same for the bill payment.

From a purely accounting standpoint, even if I were able to follow the directions, I would still wind up with the donated amount in income even on a cash basis report (the debit going to an asset rather than an In Kind expense.

What am I missing?

Solved
Best answer May 01, 2020

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QuickBooks Team

Recording a donated fixed asset in desktop

Thanks for coming back to this thread, Emess.

 

 I'm here to share additional information about how journal entries work in QuickBooks.

 

You're not losing any functionality if you'll be using a journal entry. If you're not familiar with accounting, it's best to use the non-journal entry method where we set up an income and clearing account for charitable contributions and create a product or service item for the donations. Though, you can use the journal entry method to shorten the process if you understand accounting or you follow the advice of your accountant.

 

When you use the transaction-based method, the program will automatically post those transactions to its preset accounts. For instance, if we create an invoice, the program will automatically post it under accounts receivable. If we record it using a journal entry, we'll have to manually select the accounts that are affected in this transaction.

 

I recommend reaching out to your accountant to find out what's the best way of recording in-kind donations for your business and if you're unsure of what the Fair Market Value of a donation is.

 

You can also read this article if you'll be processing a credit card donation in QuickBooks Desktop in the future.

 

The Community Team always has your back, so please don't hesitate to visit us again if you have any other concerns or further questions about this topic. Have a great rest of the weekend.

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9 Comments
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QuickBooks Team

Recording a donated fixed asset in desktop

Welcome to the Community, @Emesss. I'm here to answer all your concerns. 

 

When creating a sales receipt, the payments are put into the Undeposited Funds account by default. However, you have the option to uncheck the Use Undeposited Funds as a default deposit to account in the Preferences. Here's how: 

 

  1. In the Edit menu, select Preferences.
  2. Click Payments from the list, then go to the Company Preferences tab.
  3. Uncheck the Use Undeposited Funds as a default deposit to account checkbox, then click OK.

 

You will now see the Deposit to option each time you create a sales receipt

 

And since you're using a non-profit version of QuickBooks Desktop, you would also need to set up these following:

 

  • Income and Clearing account to clear out the bill.
  • Sales receipt and a bill to record your in-kind donation.
  • Product/Service item for each donation.

 

Also, recording fixed assets for a non-profit organization is very unique and complex from just a regular business. I'd recommend consulting with your accountant to make sure your books are accurate. 

 

Here are our articles that can help you set up the income and clearing account in recording your non-profit donations: 

 

Let me know if you need assistance with anything else. We're always here to help. 

 

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Level 1

Recording a donated fixed asset in desktop

Hi Katherine,

 

Thanks for the tip about preferences so I can now choose the account to deposit to.

While the method worked, I don't understand the need for going through all of those steps when a journal entry debiting In-Kind Assets, and crediting In-Kind Income would accomplish the same thing.

The In-Kind Income still shows up on both the cash and accrual P & L.

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Level 1

Recording a donated fixed asset in desktop

Katherine,

Thanks, I am now able to select the account for deposit.

While the method you suggested works, I don't understand the reason for creating all of the steps. A properly annotated journal entry, debiting In-Kind Assets, and crediting In-Kind Income would get the balances where they eventually wind up, with a less convoluted audit trail.

The In-Kind income still shows up on both the Cash and Accrual P & L, inflating cash income by that amount.

 

I am somewhat of a novice at QB, so what am I missing?

 

Thanks,

Highlighted
QuickBooks Team

Recording a donated fixed asset in desktop

Hi @Emesss,

 

It's great to hear that the suggested steps worked for you. I'll be joining the conversation and share insight on your query. 

 

Both what you mentioned, and what my colleague @katherinejoyceO mentioned are valid options for what you're trying to do. It all depends on which option you want to use for your books, or whichever works best for you. 

 

For the steps on  how to enter a journal entry in QuickBooks Desktop, see this article: Create a journal entry in QuickBooks Desktop. As for which accounts to use for your journal entries, I suggest consulting your bookkeeper or accountant to ensure your books are accurate. 

 

I'll be around if ever you need further help. Place it in the comments below, and I'll be sure to get back to you.  

Highlighted
Level 1

Recording a donated fixed asset in desktop

Hi Ryan,

 

I do understand how to make a journal entry, and I acknowledged that both methods work in my reply.

 

What I am trying to understand is if anything is lost by going the journal entry method. 

 

Recording the donation of a single asset would be two lines in a journal entry.

 

Using the non journal entry method, requires, on the front end, the creation of a third GL account (clearing),  a product or service item, and then for each donation a sales receipt a bill, and a second donor name so the system will accept it, followed by clearing the bill.

 

As far as I have been able to determine, either way results in a charge to assets, a credit to income (which QB treats as a cash transaction) for reporting purposes, having an identical affect on the P &L, Balance Sheet, and Statement of Cash Flow.

 

Surely there must be some reason for using the non journal entry method, as that is the method promoted on this board. I'm trying to figure out what that reason is.

Highlighted
Moderator

Recording a donated fixed asset in desktop

Hi, Emesss.

 

Allow me to step in and share with you some insights regarding recording fixed asset donation in QuickBooks Desktop.

 

Both methods (non-journal entry and journal entry) will work in recording your fixed asset donation in QuickBooks Desktop. However, the non-journal entry method will help keep track of your transactions properly. 

 

You can use journal entries if you need to adjust your entries for depreciation, sales tax payable, or reclassifying between accounts. Journal entry and reversals are not linked and won't be seen on your vendor reporting or purchases.

 

For some "How do I" steps in QuickBooks Desktop, you can always visit our Help Articles page for reference.

 

Please let me know if there's anything else I can do to help you succeed with QuickBooks. Thanks for reaching out, wishing you and your business a great ahead.

Highlighted
Level 1

Recording a donated fixed asset in desktop

Hi RoseMarjorie,

 

Sorry for not responding sooner. End of the month, and I had a number of closings to attend to.

I hat to appear dense, but I am not sure what you mean by " the non-journal entry method will help keep track of your transactions properly."

What functionality am I losing by using the journal entry method?

Thanks,

Highlighted
QuickBooks Team

Recording a donated fixed asset in desktop

Thanks for coming back to this thread, Emess.

 

 I'm here to share additional information about how journal entries work in QuickBooks.

 

You're not losing any functionality if you'll be using a journal entry. If you're not familiar with accounting, it's best to use the non-journal entry method where we set up an income and clearing account for charitable contributions and create a product or service item for the donations. Though, you can use the journal entry method to shorten the process if you understand accounting or you follow the advice of your accountant.

 

When you use the transaction-based method, the program will automatically post those transactions to its preset accounts. For instance, if we create an invoice, the program will automatically post it under accounts receivable. If we record it using a journal entry, we'll have to manually select the accounts that are affected in this transaction.

 

I recommend reaching out to your accountant to find out what's the best way of recording in-kind donations for your business and if you're unsure of what the Fair Market Value of a donation is.

 

You can also read this article if you'll be processing a credit card donation in QuickBooks Desktop in the future.

 

The Community Team always has your back, so please don't hesitate to visit us again if you have any other concerns or further questions about this topic. Have a great rest of the weekend.

View solution in original post

Highlighted
Level 1

Recording a donated fixed asset in desktop

Hi Klent,

 

Thanks for the clarification.

I didn't think to identify myself as a C.P.A.

From the earlier responses, I was concerned that perhaps the non journal entry method fed some subsidiary set of journals that I was not familiar with.

If the purpose is to automatically send transactions to the pre set accounts, assuming they were set up correctly, I believe that I can safely bypass that step.

Thank you and the others for the rapid replies.

 

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