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                             TO:  Interested Schools                                                                                                        FROM: Jim Bramer, Retired Auditor-CPA
                                                                                                                                                                                  FILE:  7002-01/schar
                                                                                                                                                                                  FILE:  0658-01/qbb

                              RE:  Fiscal Year End & Schar Issues                                                                                 Originated:  July 2000                         

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    What follows pertains primarily to a Christian School, but equally applies to accounting for any type of Accounts Receivable asset.
    We recommend the following special handling of qbSCHAR at the fiscal year end of a Christian School.  Please click here and view QB School Samples. The  following Fact Pattern is within the context of such Samples.

F A C T    P A T T E R N:

•    There is a separate "qbSCHAR 99-00" and "qbSCHAR 00-01" control accounts for each School year. This facilitates much of what takes place below.

•    There is a separate "qbSCHAR Prepaid" control account that functions for each School year.  Click here for more info about the features of separate qbSCHAR control accounts for unpaid and prepaid amounts.

•     The "Estimated Bad Debt Expense" acct number (or an "Operating Expense Acct") is 3109.

•     The "Less:  Allowance for Bad Debts" acct number (or an "Asset Offset Acct") is 1512.
  
•    Existing balances --- A debit balance of $450.00 is in Acct 3109; with, or course, a credit balance of the same amount in Acct 1512.
  
•     Write off of present balances in "Schar Prior Year - acct 1525" involves changes only to accounts 1525 and 1525A --- does NOT, of course, affect the current year's expenses.  
     
•    qbSCHAR 99-00 (see Sample within 0743-07) per acct 1510 shows the following detail:

  • Name	ID	Amount
    D-, Richard	:017	$ 65.00
    H-, Gary	:128	$ 651.00
    R-, Angela	:157	$ 265.00
    Total		$ 981.00

•    Write off only the $651.00 Schar account above.
  
•    Schar to be carried forward to new fiscal year is $330.00, or the above $265.00 and $65.00 amounts.
  
•    The Schar Prior Year acct (or an Asset Acct) is 1525
  
•    The Schar Prior Year Offset (or an Asset Offset Acct) acct is 1527

A C T I O N S  TO  B E  T A K E N:

   Fiscal Year End (FYE) Journal Entries

Acct	Acct Name	Debit	Credit	Memo	Schar I.D.
	Journal Entry 01
1512	Less: Allws for Bad Debts	$450.00		To remove
3109	Est. Bad Debt Expense		$450.00	To remove
	Journal Entry 02
3109	(1) Est. Bad Debt Expense	$651.00		H-, Gary 128
1510	qbSCHAR  99-00		$651.00	Write Off	H-, Gary 128
	Journal Entry 03
1525	Schar Prior Year	$ 65.00		Fr 99-00	D-, Richard 017
1525	Schar Prior Year	$265.00		Fr 99-00	R-, Angela 157
1510	qbSCHAR 99-00		$ 65.00	To Prior Year	D-, Richard 017
1510	qbSCHAR 99-00		$265.00	To Prior Year	R-, Angela 157
	Journal Entry 04
1525A	qbSCHAR Prior Yr		$330.00	FYE Adjust
9902A	Prior Yr Bad Debt Coll	$330.00		FYE Adjust

(1)  At year end only this account represents "Written Off Bad Debts"; during the year it represents "Estimated (or probably) Bad Debts".
    When you run a report for qbSCHAR 99-00, acct 1510, there should be no balances.
    Let us know if you have any questions about this process.

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    Please click here for list of Schar resources on www.bcidot.org . The bulk of this Publication originated in July 2000 and was . UPTD: May 02, 2008  

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       (1) An Online document, or WRIT (Writing), may be applicable to all Ministries, or it may be designed for just groups like: Evangelical Church, School, Missionary Agency or Organization, Christian Camp / Conference, or other named group.
       (2) WRIT formats include the perspective of   Jim@bcidot,org   via IOMs (Inter-Office Memos) to the Ministry Finance Team (MFTeam); THRDs, a hypothetical Online conversation with members of the MFTeam; GLEANINGS, or Scripture within context of the MFTeam; FWIW; A periodic editorial (For What it is Worth); TRUISM, or believed Ministry Finance principles; and via FAQ, response to Frequently Asked Questions

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