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At the end of every financial year, a trustee will make distributions to a Trust's beneficiaries. MYOB Essentials can be used for handling the business affairs of a Trust and the distributions to beneficiaries.
How can I deal with beneficiary distributions at the end of the financial year?
Detailed below are the two steps involved with beneficiary distributions at the end of the financial year - modifying your Accounts List and distributing the income.
This can be a complex area and the scenario below might not suit your needs. You should always seek financial advice regarding the best solution for your circumstances.
Modify your accounts list
Your MYOB Essentials accounts list will need to be adjusted slightly to reflect the distributions made to the beneficiaries. Set up liability accounts (using Account Type "Current Liabilities") for distributions made to the beneficiaries, but not yet paid. The account numbers will start with "2-", for example 2-9100. Each beneficiary should have a liability account.
Set up other expense accounts (using Account Type "Other Expense") called distribution to beneficiaries. The account numbers will start with "9-", for example 9-9100. Once again, each beneficiary should have a distribution account.
To create accounts, click your business name and choose Accounts list, then click Add accounts. Learn more about creating accounts.
Here's our list of example accounts - check with your accounting advisor about the best account setup for your requirements.
Distribute income to the beneficiaries
On the last day of the financial year, distribute income to trust beneficiaries by recording a general journal entry (click your business name and choose General journals, then click Create Journal).
Debit the Other Expense (9-0000) accounts and credit the corresponding Current Liabilities (2-0000) accounts for the amount of profit distributed to each beneficiary.
Here's an example: