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L
LL92
April 13, 2023
Question

recording a grant

  • April 13, 2023
  • 1 reply
  • 0 views

I received a grant via direct deposit to the bank. It went into an old unused account. The spend is restricted and will happen later this year. When I deposited it "make deposit" entry, it shows as grant income (Federal Grant) on the P&L. and the associated high net income. In the meantime, if I create an unexpended grant expense account....which offsets the grant income on my P&L, it net zeros the bank balance on the Balance Sheet. What am I missing?

1 reply

A
Alex M
April 13, 2023

Hi there LL92,

 

it's important that all your transactions be entered correctly for your books to be well balanced. QuickBooks Desktop is a great tool able to help you keep track of income and expenses so you can see the profit of your company. I can point you in the right direction for assistance with entering this transaction.

 

If you're entering the first transaction as a deposit to your bank account affecting the income account, then creating another transaction to increase an expense account while also affecting the bank account, this would be the reason the bank balance remains unchanged, as there is one incoming transaction and one outgoing transaction of the same value. in order to know how you should be recording this grant that you'll be using later so that your books can be balanced, I recommend reaching out to your accountant for guidance. their expertise will be able to assist you in recording this transaction so your bank account will have the right balance, as well as all other accounts involved. You can find an accountant with experience using QuickBooks software near you by going to our Find an Accountant page.

 

if you have any other questions, feel free to reach out here.

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