@Mark_R @Rose-A @MirriamM @IamjuViel 

Using QBEnterprise 2022 for Non-profits.

Client wants to use class tracking for fund accounting purposes.

In Preferences, we opt to Assign class to ACCOUNTS.

Setup three classes "Operational", "Capital Assets, and "Endowment" in the Class list.

In Chart of Accounts (herein, "COA"), we added one of these three classes to all Income and Expense accounts.

When I enter a journal entry amount to one of the income and expense accounts, then run a Profit & Loss by Class report, the journal entry I created doesn't get classed. The amount I entered shows up under Unclassified column.

What's the purpose of assigning classes at the Account level then? The only way I can see a transaction by class report is to class at the transaction level. You have to do that even if you have the Assign to ACCOUNTS feature clicked on or off. Seems like the Assign to ACCOUNTS class feature does not serve any purpose. I thought by Assigning a class to an Account, it would override any transactions (that have no class, or is classed to a different class) booked to that account. For instance, if General Revenue account was assigned a "Operational" class in the COA and then if someone books an invoice with a transaction line using the "Endowment" class to this General Account, the Profit & Loss by Class report will show that transaction in the Operational Class column (meaning that assigning a class at the Account level will override any transactions classed differently to the same GL account). 

What am I missing here? How do we use the Assign to Accounts class feature?