pending vs. completed transactions

[Mike or Penny Novack]

Maf. King wrote:

>On Thursday 15 October 2009 04:28:33 T. Howell-Cintron wrote:
>  
>
>>My bank shows my debit transactions as "pending" for up to a week before
>>they clear, and the date assigned to them on my bank's web site is the
>>date they cleared.
>>
>>I'm in the habit of entering every transaction in to GnuCash as I spend
>>the money, ie. the same day, and this is effecting the running total of
>>the account.
>>
>>Ideally there would be two date fields - purchase date and cleared date,
>>but that's not the way GnuCash works.  What should I do?  I could update
>>the transaction date to reflect the date it cleared, using the NUM field
>>to order them according to my bank's statement, or I could just continue
>>to do it the way I have been and know that though the running balance is
>>incorrect the total available funds still works out to the right amount?
>>
>>    
>>
Should point out here that this is NOT something new in accounting and 
is what "reconciliation" is all about. Let's for the moment forget about 
modern things like credit cards and debit cards and think of old 
fashioned checks.

1) You make out a check and mail it off. Technically the legal date is 
when you made "constructive delivery" (the postmark date) but normal to 
book the amount (enter the transaction) as of the date on the check. 
This is what YOUR books should show.
2) There may be a significant amount of delay before the checks arrive, 
are deposited by the recipients their banks, and get returned to yours 
for "presentation" though these days with electronics not as much dealy 
as in the old days. The bank records the transaction as of that date 
which is when the change shows up in the bank's record of your account.
3) Similarly when you make deposits. If you deposited cash or 
equivalents (a cashiers check for example) then immediately available 
but amounts from ordinary checks not necessarily so and possibly never 
available (that check might bounce). But you enter the amounts as of the 
deposit date and make corrections later if necessary.
4) Credit and debit cards not all that different except the time delay 
normally less, just a day or two. YOUR books should show the date as it 
is seen from your end and the bank's as seen from their end.

With a large volume of transactions you perhaps do "on line" banking 
access of your account and then reconcile that download or with a very 
low volume (my organization averages perhaps 2-3 checks and 1-2 deposits 
per statement) you might just wait for the bank statement to do that. 
Reconciliation is the process by which you compare what your records 
show and what the bank records show taking into account what might still 
be "floating" as of the date you reconcile.

Michael