I obtained my Diploma in Manual Bookkeeping from the ICB in 2009 but have never put my qualification into practice, as I am currently employed in an entirely different line of work. Recently I was approached by a friend who asked if I was interested in being the Treasurer for a small registered charitable company. The charity uses Sage Instant Accounts version 6 but I myself have versions 12 (on a PC) and 17 (on my laptop).
Last month someone ran a half marathon to raise funds for the charity. The majority of the money collected, £1000, was presented as a cheque, which was deposited in the bank account. However about £90 was presented as cash which was deposited in the petty cash. Out of the petty cash the office staff then purchased £30 worth of flowers to give the person as a thank you gift.
When I look at the Sage P&L and Trial Balance the Total Donations show as £1060 rather than £1090. What appears to have happened is that :
1. The bank Account has been debited £1000 and the Donations Account credited £1000.
2. The petty cash has been debited £90 and the Donations Accounts credited £90.
3. The petty cash has been credited £30 re the purchase of flowers and the Donations Account has been debited £30 accordingly.
To me the Total Donations for the month in the P&L and TB should be £1090.
Firstly, am I correct? and secondly should the purchase of the flowers not be posted as a debit in some account other than the Donations Account, and if so which account do you suggest ?
yes you are correct. It looks like they are trying to hide the £30 they spent as a thank you gift! This should be posted as a debit to a account on the P/L called Gifts.
