 In this presentation, we're going to record a donation of office space. In other words, there's going to be a donation not of cash, however, but of space, of space that's going to be used by the not-for-profit organization. Let's get into it with Intuitz. QuickBooks Online. Here we are in our not-for-profit company dashboard. We're going to be going over to our Excel file to consider what our objective will be. So we're going to jump over to the Excel file. We're going to have our practice problem in essence on the left-hand side, and we're going to enter that into the Excel worksheet. Just taking a look at the journal entry because that'll be a more transparent view that'll help us to fill this information out in the QuickBooks system, so the QuickBooks system will be easier to populate the information, but it's less transparent. So we're going to have a little bit more complicated than just a straight donation here for our first transaction. We're going to have office space was donated. So rather than just a donation of cash in this case, there was a donation of office space, therefore non-cash type of transaction. Similar thing that you would expect if cash were to be donated. Basically we're going to put the credit to or revenue or we're basically going to increase kind of like the revenue type of account, which is going to be contributions without donor restrictions. The debit in this case, not going to cash, we're not going to increase cash, but instead increase rent expense. And that's kind of like the tricky part of it, right? So if somebody gave us as the charity as a not-for-profit organization office space, it's still basically contributions to us, which is kind of like a kind of revenue to us. Contributions would be kind of like we would record it in similar fashion as revenue if it were a for-profit organization. That will be down here. Contributions without restrictions. Now you might say, hey, there's a restriction because it's basically a property. You can't do as much with it as you can with cash because cash is more liquid. That's not what we mean with a restriction here though because that would be correct because cash would be less restrictive in its use and its function. But we mean that when we say it's not restricted, it means that there was no restrictions on how we're going to use it put on by the donor. So if it was restricted, they'd say something like that has to be used for this particular project or in this particular way or something like that. So we're going to say it has no restrictions here. So we're increasing that just as we would if it was cash that would be increased. It's going to be increasing kind of like the revenue type of account. On the other side, like we say, it would be like we're paying rent, right? If we're actually using the facilities in our business, then we basically have a rent expense equivalent to the donated amount. Now how do we know what the donated amount would be? We'd have to use some type of fair market value type of estimate to do that because of course there wouldn't be any market transaction. We didn't pay for the cash for it and therefore we'd have to estimate what the actual value of the rental property would be and then we could put it on the books and credit the revenue and debit the rent expense. That's going to be our transaction. Now the challenge of us putting this into the QuickBooks then is going to say, hey, I'd like to put this in such a way that we can track the donations both in terms of reports and provide that donation information like a donation or receipt to the donor to like kind of like the customer if it was a for-profit type of organization. So in order to provide that type of documentation and basically track the donations, we want to use our typical kind of donation form. So I'm going to go back on over to QuickBooks. I'm going to select the dropdown up top. The typical donation form that we would have is going to go to the customers and we would have the sales receipt. So you'll recall the sales receipt is the one that we created and we put donation on it so it's going to be the donor receipt that we would like to provide back to the donor. Now the problem with this form is of course that typically this is a form that's going to be used when there's a cash transaction. So the other side of this form will typically be going to cash. If you think of a sales receipt type of form or the donation form, you could think of it increasing kind of like the revenue type of account for the not-for-profit organization. The other side usually going to cash. So what we're going to have to do is enter this into the system and then make an adjusting entry for it. You might ask why don't we just do it a journal entry. We could do a journal entry for this type of transaction, but if we were to do a journal entry, we couldn't easily assign or provide the donation receipt to the customer and we can use this form to track the customer information a little bit more easily as well. Now we would use the same form if it was a cash donation so we could see kind of the two transactions and one here as we enter this information. What would happen for a cash donation and what would happen here for this type of transaction as well. So we're going to put in the customer. I'm just going to put a generic customer donor one. This is going to be donor one. We're going to set up donor one. Now obviously you might want to put the details for the donor as you as you populate the donor, the details being more information such as the phone number and contact information. If I was to hit the detail button here, you can have the contact information. This would be useful so that of course we can keep contact, send out our newsletter and so on and so forth. For the purposes of this practice problem, however, I'm just going to do the minimum, which is going to be the name in order to create our donor receipt here. So I'm going to go back out. I'm just going to say donor one, that's going to be our customer. Also note the terminology of customer because it's it's still going to be using the terminology oftentimes for like a for profit type of organization, which would be a customer. But obviously for the not for profit, the customer would be donors. So then I'm going to say save. If we had the email address, then we can have the email address here and we can send it by email. I'm going to tap through this. Then the billing address, if we if we populated the billing address into the donor information or customer information, that would populate here for us as well. Date for our practice problem is going to be 010120. So we're going to pick that up at 010120. I'm going to keep the sales receipt number to populate by itself there. We have the tags. We're not going to be adding any tags here. So then we're going to go to the payment method payment method. We have cash check and credit card. Now, again, this wasn't a cash transaction or a check transaction. This is basically going to be the rent that was transacted. But we need to pick one. So I'm going to go with the cash transaction here. I'm going to put this in the description in the reference that it was a rental transaction, basically a bartering kind of transaction or donation transaction. Then reference number we have the deposit to now the deposit to field will be default oftentimes to this undeposited funds field. If it were a cash donation, the idea then being that it will go into undeposited funds. And then when we go to the bank and make the deposit, we will group those deposits in the format that it will be seen on the bank statement. So that's going to be kind of the idea here. What we want to do is we're going to put it into undeposited funds and then we're going to transfer it out. We're going to use this as in essence a clearing account. And then we'll make a journal entry to put it to where it should go, which is going to be the rental expense. So then we're going to go down to the service date. I'll put the date at 010120 here. And now we need to set up an item. So I'm going to set up a standard kind of donation item. This would be similar to the items that we would have in a for profit type of organization if we sold goods or services, the items allowing us to help us to populate the sales receipts and invoices. So we're going to set up an item for our not for profit organization. It's going to be a service item. I'm going to call it donation. So we're going to set up an item for donation. I'm going to type that in there and select tab. Then we have our options here of inventory item or non-inventory item or if we want a service item. So what we're doing here is going to be a service item. So we're going to be picking up the service item. We're not tracking any inventory with this item where we will be setting up. So I'm going to then copy the donation up top. I'm going to move on down. No SKU, no category. We're not going to be having classes here or as of yet. I won't be adding a class for this item. And then we're going to be putting it into the donation. So we're going to set up the donation here and then the sales price or rate. Not going to include a sales price or rate because it could vary depending on the type of donation that we have. Now also note that it's going to a sales account. That's going to be our revenue account. So it's going to say, Hey, I'm going to hit that revenue account. Now notice it's, it gave us the sales account with the chart of accounts that were set up. I'd rather not call it just sales though. I'd like to call it something like contributions and having the unrestricted versus restricted contributions. So what I'm going to do is I'm going to go over to the chart of accounts. What I could do is set up a new account here, but then I'd have two sales accounts to income type of accounts. So I'd like to go to the chart of accounts. I'm going to keep this open. What I'm going to do is hover over the tab up top, right click on that tab and we want to duplicate the tab. This is a really nice feature that we can have in the QuickBooks online, allowing us to work in two different tabs, two different fields. I'm going to close this one up. We don't need this tab over here. Now, once we have this second tab open, we have two tabs. Now I'm in the tab to the right. I'm going to go down to the accounting on the left-hand side. We're going to go down to the accounting section. And then there's going to be two sides. There's going to be a chart of accounts. If there's a little icon in the middle that says look under the hood, then go ahead and click that button and then should show you the chart of accounts. So the chart of accounts is that this is the accounting list basically that has been given to us. It will typically be in order and I suggest thinking about it in order by account type. In other words, you could think of it as basically the balance sheet I'm closing the hamburger up here. I'm closing the hamburger for some more space. You could think of it as in essence, the balance sheet on top of the income statement, balance sheet including assets, liabilities and equity, and then the income statement having income and expenses. And then further breaking down those categories, assets being broken down by liquidity. So we have the current assets versus the long-term assets and so on and so forth. What we want down here is the revenue account. We have the revenue account down here. What I'd like to do is just change this income account to a name that I would prefer for the major income account, which is going to be something like unrestricted contributions or contributions unrestricted. So what I'm going to do is select the dropdown. We'll go to the dropdown on the right-hand side and we want to edit this account. So I'm going to go to dropdown, edit and then I'm simply going to go to the name right here. There's the name. I'm going to take that name and call it now, contribution and then unrestricted. So unrestricted contribution. Now, if you look at my Excel worksheet over here, note we used some fairly long names. So I put, we have here contributions without donor restrictions. It's kind of like the long formal name. We don't really want as long a names if possible. So we're going to try to shorten some of these names up as we put them into QuickBooks. We'll be limited. We can't have names that long, oftentimes as well too. So there it is, contributions unrestricted. We're going to say save and close. Once done then, we can go back to the tab to the left. Now let's go back to the tab to the left where we had our sales receipt where we were going down to this income account here. And let's go ahead and see if we can change that income account to contributions unrestricted, contributions unrestricted. So that looks good. Now let's go ahead and save and close. So we're going to say save and close on that one. And then we're going to put the amount and the amount then, what did we say the amount was? 35,835,800. So I'm going to say 35,800. Then we have the class here. So I'm going to pick the class and the class. We're going to say this is going to be unrestricted. So then we're going to say this is unrestricted. So remember it is restricted in the sense that it's a rental item, but the donor didn't put restrictions on it. So we're not talking about restrictions by usage of the thing or the type of thing that we've received. We're talking about restrictions that were placed on it by the donor typically. So we're going to say unrestricted. Now I'm going to change this up top to the deposit rather than go into the undeposited funds. I'm going to set up another account up top for these types of transactions. It's going to be a cash type of account but a clearing type of account. So it will go into that cash account and then we will remove it from that cash account. So this is going to be basically our clearing account that we'll use for any non-cash type of donation such as this. So I'm going to say add new. We're going to add new. We got to set up as a bank account type of account because that's the one that we will need when we create a sales receipt type of form. Then the cash on hand, that's fine. I'm going to go back up top here and then however, I'm just going to call this the cash clearing account. And that just means what I mean by that is that it should always be zero. It's just an account that's going to be going up and then going back down. If there's something in it after it should have gone back down then there's something wrong with it, right? So it's always should be something zero. And I mean pretty much immediately we're going to enter two transactions that will increase it and then decrease it. So rather than doing that in the checking account which if we mess up, it'll be harder to see if there's an amount in there and we'll also have to reconcile the zero accounts when we do the bank reconciliation. It would probably be better to have a clearing account for it so that we can see that clearly. And then I'm going to say save and close. So there we have our clearing account. We're going to record this. What's it going to do when we record it? It's going to be increasing this clearing account amount. The other side is going to be going into revenue. It's going to be going into the revenue into the unrestricted area for the revenue when we think about the class tracking of it. If we were to preview this item, let's go down below and say print or preview and let's print or preview this item. You'll see that then it has donation on it. So instead of basically a sales receipt on it because we changed the name of it here. So even though you see sales receipt everywhere else it's going to say donation when you actually provide the form. So I'm going to then close this back out and then I'm going to say save. So we're going to save this item and then let's go take a look at the financial statements. So I'm going to close this back up and we're going to be opening up the financial statements. So then let's go to the reports on the left hand side. We're going to be opening up our favorite reports that being the balance sheet and the income statement. Let's open up the balance sheet first. We're going to open up the old balance sheet here. So here's our balance sheet. We're going to make this for the month of January. So we could change the dates up top from 01, 01, 2, 0, I'll just make it for the whole year, 12, 31, 2, 0. So there we have that. Then we're always going to be running this report. So we'll run this report anytime you make a change this can be the update or refresh type of item over there. Within the balance sheet we have the 35,081, 800 in the clearing account. So I'm going to open this up. We could close the hamburger over here and I'm going to hold down control and scroll up a little bit and that'll zoom it in. So I'm at the 125 zoom. That's where I like to be. Now note you can zoom in here. So if I go to the 35,800 and zoom in on it, then I could go to the clearing account and zoom in on that. That'll take us back to our sales receipt or our actual donation form. So there's the form that we have dated input on. That's it. So that's a great tool for us to see what is actually happening to the financial statement. I just closed that back out. I'm going to scroll back up top and I'm going to hit this back to report summary that will take us then back to the balance sheet report. Now the other side of it is going to go down to the equity section. It's included in net income on the equity section that we could further see the detail on if we go to the income statement or the P&L profit and loss. Now to do this, I'm going to go back up top and I'm going to duplicate this tab again. So I'm going to hover over this tab up top, right click on that tab, duplicate that tab. So the balance sheet's on the right. We're going to go back to the left then. So then on the left, I'm going to open up the old hamburger again. We're going to go back down to the report. So we're going to open up our other favorite report, the other major report, that being the income statement report or the P&L, the profit and loss. So we'll scroll down, pick up that P&L, profit and loss. Otherwise, no one has the income statement. I'm going to bring the dates up top. I'll just pick it out for the full year again. 010120 to 123120. Then I'm going to run that report. So we want to run this report all the time to make sure that it's picking everything up. That it's refreshed. And then we have this item in the contributions and I put it into the contributions unrestricted. Now you might ask, notice I'm kind of doubling up on the terminology because I said unrestricted here and you'll recall that we put it into a class of unrestricted. So this is kind of like a double check. I'm going to put it into an unrestricted account and I'm also going to put it into an unrestricted class as well. So then I'm going to go back up top. I'm going to right click on this tab and I'm going to duplicate this tab. And then I'm going to go back to the tab to the left. And before I move on, just note that when you think of the unrestricted, that's basically kind of like revenue, donation revenue, similar type of things for the not-for-profit type of the organization. That's where the income or inflows of money are going to be coming from, principally are going to be those donations. In this case, not money, but the use of the rental facilities or the rental property. Let's go back on down to the reports again. So if we then go back to the reports and I'm going to hold down control and scroll down a little bit and that'll bring us back to the 100%. It's easier to see things and navigate around when you're not in the reports. If you're at a 100% and you can maximize or zoom out then when you're actually in the reports. Now I want to take a look at the business overview reports and what I'm looking for now is the profit and loss by class, profit and loss by class. If you're in a not-for-profit organization you're probably going to be using this all the time and may then want to put a little star on this one and that'll make it one of your favorite type of reports. Then I'm going to go into the profit and loss by class. So let's open that up. And then of course we have the unrestricted at the 35, 800 and not specified here, nothing. Now this not specified column is a great tool to have because it'll show us if we just missed if we just didn't record a class. So pretty much all of our transactions we're going to record a class two and then anything that's in this not specified we'll drill down on and then we'll fix it. So that's a great tool to have there because you might say, well, it's confusing to do the classes. What if I forget to do the classes? Well, we'll actually forget kind of on purpose for a few of them. And then we'll go back and we'll reallocate with the use of this not specified column drilling back into it and assigning classes at the end of the time period like the end of the month. So we're going to go back up top. I'm going to do this again. I'm going to right click on this tab again and then duplicate this task. And now we have the balance sheet, the P and L and the profit and loss by class. Let's go back to the balance sheet. So on the balance sheet, you'll recall we put this into the clearing account. That's not really where we wanted to go. What we really want to do is we want to be putting it into the expense account. So now we're going to, and the reason we put it into that clearing account was so we can give the donation form and track the donation. So now what we're going to do is in essence a journal entry, taking it out of the clearing account and making an expense with it or putting it into an expense account. Now we can do that with basically an expense form like a cash transaction form or we can go to the register directly or we can use a journal entry. So let's go back to the first tab and I'm going to hit the old hamburger over here. And again, just note that a couple of different ways we could do this. We're taking cash is going down now. It's in that clearing account but cash is going down so we could do this with a vendor form such as an expense form. I tend to use a register when I do this. So I like to use the register. So what I'm going to do is I'm going to go back over here and I'm going to go to the accounting down below and then I want to go to our chart of accounts. So here's going to be our chart of accounts, the cash on hand, there's the cash on hand. I want to open the register which looks kind of like a check register. Well, it is basically a check register but when you have like a hand checking account type of thing if you had a checkbook looks kind of like the checkbook. And I'm going to close the hamburger up top and then I'm going to add a transaction down here. So the transactions I can add in the format of a check. In this case, it's going to be decreasing money but I don't have a check number. So I'm not going to use the check field. I'm going to use the expense type of form. So it's still kind of an expense form. You'll recognize these forms but it'll be in a check register format. When we go back and look at this form, it'll be in the format of an expense. It won't take you to the register. So let's see what I mean on that. We're going to say expense type of form. This is going to be the date 010120. And I'm not going to put a reference number, not going to put a payee, the memo, I'm going to say non-cash donation, rent, we might say, rent. And then a class. I don't need, I'm not going to put a class here because this is going to be a balance sheet type of account. And note that this will have an income statement component to it, which will be the rent expense. However, we're still not going to assign the class because we're going to assign it and it'll show up into unclassified when we run the report by class. And then at the end of the month, at the end of the period we'll actually use that unclassified column to help us to drill back down on that and assign the expense classes in accordance with our percentages. So we'll see that at a later time and we'll see the categorization when we go to the profit and loss by class report. Then the amount is going to be that 35800. So the classes are typically going to be necessary. We're going to be breaking out the classes when we think about the income statement type of accounts. And then the account, the other side is going to happen. So this is going to be decreasing the cash account, the 35,000 that's in the clearing account. The other side needs to be going to that expense account, which is in essence rent expense. So let's see if we have a rent expense here. I don't think, I don't see all that we do with rent and lease expense. So that looks right. Is that what we had in our Excel sheet? We had rent expense, so it looks good. So we're going to keep it there. What's this going to do? Decrease the checking account or that cash account, the clearing account, the other side going to the expense account, rent and lease. Let's go ahead and save that. So I'm going to say save here. And this transaction has one or more missing classes. That's okay. That's that check field that saying, hey, you didn't assign a class to it. We're going to say that's okay. We record it. Then let's go back to the balance sheet and let's refresh the balance sheet by saying run that report again. I'm going to close up the hamburger. I'm going to hold down control, scroll up just a little bit and you'll see the balance sheet has nothing in it now because the clearing account has now cleared out down to zero. That's what it means. That's what I mean by a clearing account. That should be zero because this had two items that are basically on the P and L profit and loss income statement. That would be want to name it. Income statement, closing up the hamburger. I'm going to refresh that report. We're going to run that report again. And so we see then the 35,800 here, the 35,800 here and then the 35,800 expense down below. And then I'm going to go back to the profit and loss by a company. I'm going to close up the, or profit and loss by class. And then I'm going to run this report. So if we run that report, then we have the unrestricted and the not specified. So this rent item here is going to be in the not specified area. And we're going to keep it there for now. We're going to keep it there. And at the end of this process, we may break these out and be using this item in the unspecified to do this easily, to be able to go to the end report, click on it, go back into the actual financial statement and then use our allocations and allocate out some of the expenses in accordance with our expense allocations here. So we'll talk more about that at a future time. We'll assign out the class here. For now, let's go into that 35,800. There's our transaction. Notice how easy it is to go back to the transaction. Notice the transaction type is an expense type of transaction. So when I go back into it, it actually goes into an expense form. It doesn't take us to the register. So it's not taking us to the actual data input form. It's taking us to, it's not taking us to the register. It's taking us to the data input form that we basically mimicked by putting into the register. So it's, the QuickBooks is always gonna try to take us back to a form in other words. So I'm gonna close this back out and we're gonna scroll back on up top and we'll go back to our report summary here as well. Let's go back to the first tab one more time and open up the old hamburger. And we wanna take a look at one more report. So if we go to the reports down below, I'm gonna scroll down, we're not looking at the business items, who owes you money, that's accounts receivable, sales and customers. So within the sales and customers section, we're gonna have an item income by customer. So this income by customer, let's look at the income by customer summary report. And this will break out the income by customer, which is gonna be necessary because these are reports that we might need to sum up the information or the donations by customer to provide that information to them. So that's another reason we wanna use kind of like that sales receipts type of form. It'll help us to populate this report, the income by customer summary type of reports. So that's gonna be it for now. Let's get outta here.