You can do either. We post all the transactions for a fundraiser, debit or credit under the same Income category for the fundraiser. I'm not an accountant, so maybe that would give a CPA apoplexy. But it works best for us, because 99% of the time, you and your members want to see NET profit. If you keep them separate, then you constantly have to manually net the two numbers to see if you made budget. I believe one of the most important duties of the treasurer is provide information to support decision making. So I like being to show very easily, for all to understand, what our net position is.
OK, all that said, there are a couiple disadvantages...
At the end of your fiscal year, when you need to complete Form 990/990EZ for the IRS, you'll need to separate your income transactions from your expense transactions. The IRS requires that you report gross proceeds separate from expenses. So you'll have to do some reshuffling of the transactions, but that's not that hard if you export the Finance Manager transactions to excel. For, me, that effort is worth the tradeoff.
Also, if your PTO is so good at record-keeping and budgeting, that you set expense budgets for your fundraisers (as opposed to just one overall net profit goal for the event which is what we do), then you may want to keep inc/exp in separate categories. For example, if you set an expense budget of $400 for Movie Night, and it's vital that the committee not exceed $400, regardless how much money they mgiht make on concessions, then you might want to set up a Movie Night Expense category with a budget of $400. That way, you can monitor the budget performance very easily. But I think you'd need to have really good historical records and a really compelling reason to want to set up expense budgets for fundraisers. Most of the time, in our PTO, we just focus on the Net Profit goal and let the committee figure out the best way to manage income/expense to meet that goal.
