trial balance - how to find mismatch question

[Wm]

On 16/02/2018 08:20, Adrien Monteleone wrote:
> At least on my version of the Trial Balance report, there is no ‘Imbalance entry’ specifically.
> 
> There is at the bottom, the Imbalance-XXX and Orphan-XXX accounts listed along with the others.
> 
> There is also a line for ‘Unrealized Gains’ or ‘Unrealized Losses’ (I have the latter, even though the report duration was a single day with no price changes, I gave up trying to figure that one out)
> 
> The ‘imbalance’ I’m speaking of trying to resolve, or at least finally attributed to a rounding error with the XAG account, was simply the difference between what the report shows as Total Debits & Total Credits. (note, these aren’t labeled as such on the report - but they appear at the bottom, and that’s clearly what they are) There is no figure on the report that shows this difference. I had to calculate it manually. When I decided to audit the report for each account is when I found the foreign currency account out of whack. The remaining difference was attributable entirely to the ‘unrealized losses’ line.
> 
> So, the full difference between debits and credits is the SUM of the ‘Unrealized Gains/Losses’ line and the discrepancy due to rounding.
> 
> At least in my case.
> 

I'm liking your approach to things, AdrienM.  So try this:

Make a copy of your book for safe keeping.

Go to File / Properties and if it is ticked (checked in american) untick 
it, my guess is it will be unticked (unchecked) so you will be about to 
enter the world of trading accounts.

I love them for what they do and since there is a discussion in another 
thread about naming things like the General Ledger or Journal, think 
"Trading accounts" is a bad name.  Who cares about a word?  Welcome to 
some marvellous accounting :)

Onwards.

Close your book and open it again

Actions / Check & repair. [1]

[1] if you are using business accounts you might need to run Check & 
repair on individual accounts as there was a problem there and I can't 
recall exactly if it has been fixed or not, but no harm done in double 
checking. You only need to do this extra step for accounts that have a 
type of A/Receivable or A/Payable, my understanding is all other 
accounts are covered by the general check.

You should now have an extra top level account called Trading [2]

[2] it is badly named (but I think people that use it are used to the 
name now) and arguably badly positioned in the account tree as it 
belongs in Equity in accounting terms so keep that in mind.

Open the Trading account and explore a bit.  All the differences you 
were wondering about should be there and you should be able to delete 
the Imbalance, Orphan, et al accounts as they should be empty unless you 
really have entered an imbalanced tx <-- everyone makes a mistake sometimes.


> So there are two problems with the report:
> 
> 1) There should be no losses or gains if there were no trading transactions. Certainly, this is impossible if there is only one day on the range of the report and the price is the same. If all you have are opening entries and you attempt to run a trial balance for that same day, you can’t have either a gain or a loss, unrealized or not.
> 

Watch out for the use of the word "trading" it is idiosyncratic in gnc.

> 2) Because the Equity:Opening Balances account is the result of rounded figures for each entry in a foreign currency, the report’s method of taking the foreign currency ending balance as of a date and doing the exchange rate calculation at the end, will always produce a discrepancy. The report would have to sum the book-default currency amounts individually or somehow a book-default currency balance would have to be maintained and that used instead. Alternatively, a foreign currency account could use the same precision as the foreign currency itself, thus removing the potential for rounding errors if not eliminating them.
> 

I think I have already answered this [3] but live multi-commodity TB 
work is not for the faint hearted and generally isn't necessary unless 
someone has taken a position on the movement of currencies or 
commodities against each other and is making it their business.

[3] it may have been modded, I don't double check unless it is obvious 
something hasn't got through.

> Possibly, increasing the decimal places and re-entering the transactions for the XAG account might resolve the rounding issue. (only because now the USD amounts sum correctly to match since they don’t round enough) But then ALL USD accounts would have this extra precision which is not desirable generally.
> 

Try Trading accounts before that weirdness.

> The alternative would be to reduce the precision of the XAG account, but again, that is undesirable for accurate tracking of ownership quantities of the actual metal. (or currency if that’s the case)
> 

As above, this is what Trading accounts are for.

> The per-account precision setting seems to only affect the default currency for that account, in this case, XAG, not USD, which seems only to be controlled by the book setting.
> 
The whole point of Trading accounts is that the units, decimals, etc can 
be arbitrary.

It is a way of recording differences.

Try it, you might like it :)

A: If you don't like it let us know anyway as I think we know it isn't 
presented well.  I'm thinking you are one of the people that might 
understand them whereas many single commodity people (aka dumb 
americans) don't.

-- 
Wm

Never vote for a man that wants to be your leader until he dies. 
Particularly if his wife thinks it is a bad idea.  And his son-in-law 
has had his security clearance down graded.