Equity-backed funds (or just Funds) are accounts that show money that has been set aside for a specific purpose.
When creating a Fund, Ledger will also create an account for its equity that will carry over into the next fiscal year, as well as an income and expense account to track its activity throughout the year. The Fund Equity, Fund Income, and Fund Expense accounts will automatically be created for the user, no additional steps are necessary.
Since Funds take a book's overall equity calculation into account, a separate transaction will be required to establish a beginning balance.
To add a new Fund and its corresponding accounts,
- Go into Ledger from the Navigation bar. If your site has multiple books, you'll want to make sure you have the correct book selected in the upper right corner.
- Click the Chart of Accounts tab to view all of your current accounts.
- Click "Add to chart" to open a creation window to the right.
- Enter the account name, and account number, if applicable.
- Under "Create account under", use the drop-down menu to select either the Funds account type or a parent account under the Funds heading further down the list.
- If the Fund's income and expense account are going to be budgeted items, check the appropriate box to allow this.
- Click "Save" to confirm the creation of the account.