Temporarily Restricted Net Assets

by Ben
(Syracuse, NY)

I'm a fresh-out-of-college accountant with not a whole lot of real world accounting experience. I've been the church bookkeeper a couple years now and until this time I've used only one category of net assets for all donations, unrestricted and restricted. I've simply broken out the cash account into different categories to keep track of designated categories (general, building, missions, for example).

For 2014 I want to start recording designated funds as increases to temporarily restricted net assets. If I account for designated offerings through temp. restricted net assets do I still need restrict the cash that's been designated?

So I guess what I'm asking is: if funds have been designated, is it acceptable to use that cash for operating needs as long as we maintain that "reserve" in temp. restricted net assets--or must we restrict the actual cash? I hope I make sense!

Thank you for your help and your resources!