Fiscal Year End & Schar Issues  7002-01 ZZar

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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                         


    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.


    Please click here for list of Schar resources on www.bcidot.org . The bulk of this Publication originated in July 2000 and was . UPTD: March 09, 2012  

ABOUT  US   |  OUR PURPOSE   |  TABLE OF CONTENTS   |  SEARCH  MATTERS  |  HELP DETAILS   |  FUND ACCTG VIA COMPUTERS   |  GLOSSARY