Funds are used like "buckets" to track how your assets and liabilities are allocated. When used correctly, you are able to easily see how much you have in each bucket. This allows you to know how much you have allotted to your Building fund, Youth fund, or New Carpet fund, even if all this money is deposited into and spent out of the same bank account.
Let's say that you need a Building fund in addition to the General fund. As contributions are made, some amounts are allocated for the general use (tithes, offerings, etc.), and some are designated specifically for your building program. Even though all the money is deposited into the same checking account, by designating a fund you can easily track how much money has been designated for a specific purpose.
To view, edit or create a fund, click "Funds" on the Accounting screen toolbar. Click a fund in the list to see additional information about that fund, or to edit the fund name.