we have a not for profit horse club, we have received $2000 from a grant.
this money will be spent later in the year to purchase equipment.
where should the deposit sit initially? I don't want it to look like it's money we have to spend. thanks
I would put it to an income account called Grants received
If you are not going to spend this money now, then it should be posted to a Liability account until acquittal (spent). It is treated as a liability because you have an obligation to spend/put towards an expenditure.
You can either create a new account under your Current Liabilities (Grants - For Acquittal), or even just post it to your Liability account for Advance Revenue (if you have such already).
One you have spent those funds, you can then perform a journal from your Liability Account to your Other Income/Grants Received account.
thanks very much, that's what we will do as we don't plan to spend the funds immediately