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Mr Debit


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double entry for investment management charges
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A charity invested 100K in an investment fund which shown a gain in market value at the year end of 6K . Included within the market value of 106K are £600 of investment management charges.

I want to show the market value of the investment fund on the balance sheet at 106K and also the management charges of £600 in the income and expenditure account. I am proposing to make the following entries

dr investment fund 6000

dr management charges 600

cr gains/losses on inv funds 6600

 

I'm not 100% sure this is correct - any advice would be appreciated

nb - I have simplified the figures



-- Edited by Mr Debit on Thursday 4th of September 2014 07:39:36 PM

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RobH


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I don't see any problems with your journals, I think the important thing is that it is clear what you are doing so if there is a need for a correction it is obvious where the figures are from. I'm not sure what the usual way to deal with management costs would be but my first instinct would have been to just credit the gain with the £6000 and ignore the management costs.

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Rob
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