Fees vs. Payments Non-Deductible vs. Deductible Expenses
James G. Hawkins wrote:
Clubs have expenses other than buying securities. If a member puts money into a club's account (bank account or petty fund) but that money is used for expenses, where does it appear on a report? As the program works now, the money is credited to the member but seems to "disappear".
Member payments to a club become an asset of the club.  That money can then be used for any purpose that the club deems appropriate.  There is no reason to distinguish between "funds for expenses" and "funds for buying securities".  Therefore, these funds are commingled with all the other club funds in the specified account on the Cash Account Summary Report.  If  you want to see a record of transactions in each cash account, go to Accounts and click on the name of the specific account.  A new display will open giving you the entire transaction history for that account.

The only exception to this concept of commingled funds are funds specifically set aside for NON deductible expenses such as meeting refreshments, parties, flowers for a sick club member, etc.   (See IRS Publication 550 for specific identification of deductible vs. non deductible expenses)    At this point in time, funds paid into the club and monies paid out of the club for NON deductible expenses should be handled exclusively in the Petty Cash account and NEVER commingled with other club assets.

As far as the "disappearing"  money,  when a member makes a deposit into the club, either a payment or a fee, that money goes into the selected cash account. If the deposit is entered as a payment, that specific member will receive additional units in the club.   If the deposit is entered as a fee, that specific member does not receive additional units even though the deposit does increase their cost basis in the club.   Also, the fee increases the assets of the of the club without a corresponding increase in the number of outstanding
units, resulting in a slightly higher unit value.    Therefore,  a member PAYMENT increases the number of units held by, and the cost basis of, that specific member but not the unit value of the club.   A member paid FEE increases the cost basis of the contributing member and the unit value of the club but it does not increase the number of units held by the contributing member.
St.Louis, Missouri