ORPHAN vs. IMBALANCE
sunfish62 at yahoo.com
Mon Feb 9 12:56:37 EST 2015
As the originator of the thread, I’ll note that the discussion has veered into other (still useful!) areas of consideration. My question had to do with whether there was a substantive reason for having ORPHAN accounts *and* IMBALANCE accounts.
I still don’t have an answer on that question, but I’ll note that Mike’s answer and the rest of the discussion suggest that the distinction that John and Derek made is lost to most.
Since there isn’t a hue and cry to put in the work to unify these two types of accounts, I am happy to let things be as they are. Whether (and how) to implement behavior changes in GnuCash on when these accounts are invoked, I leave to others.
If I were going to put some text into the Guide to explain the distinction, does anyone have any recommendations on what that might look like?
On Feb 9, 2015, at 9:03 AM, Mike or Penny Novack <stepbystepfarm at mtdata.com> wrote:
> I have an account called "Errors and Exceptions."
>> There are situations where a bookkeeper might not be sure where (for example) to post an expense, and needs somewhere to “park” it so as not to interrupt data entry. Once the right expense account has been identified, the Orphan or Imbalance can be corrected at leisure. In paper-and-pencil days a Suspense account was used to make sure the books balanced in such circumstances (or more usually because a transcription error stopped the books from balancing), and this is essentially what the Orphan and Imbalance features are providing. I’m content with the status quo, but would accept a warning about a posting to Orphan or Imbalance with the opportunity of going back to fix the offending transaction. Michael
> OK, different things here, and all of them might be useful.
> 1) "Imbalance" and/or "Orphan" ---- Sometimes, in the middle of entering a transaction, you realize that you need an account that does not yet exist in the chart of accounts. What do you want to happen? Have to abort the transaction , create the account(s), and reenter the transaction? Or would you prefer to complete the transaction (using "Imbalance" or "Orphan"), create the account(s), and then fix the transaction> Keep in mind that some research might be needed or consultation with your accountant.
> 2) "Over and Short" --- no, this is something else. In a retail business where cash is involved the register tape might not match what is in the register drawer. Even after counting and recounting, no match. So for that day the transaction recording "sales" will be a split with "undeposited cash" and "over and short".
> 3)" Suspense" --- Not just in the days of pen and ink on paper but even today. It might be the policy of the business (was where I worked) that all incoming checks were immediately deposited no matter what. No matter hadn't a clue what the check was for (no supporting paperwork enclosed), check in wrong amount (say too much), check for multiple things not all the paperwork included, etc.
> So recorded in "suspense" and it would be somebody's job to monitor suspense and get these corrected to where they should go, make refunds, etc. You need to understand that sometimes could be complicated and time consuming. Just like those of you who have "receivables" and "payables" might be running "aging"and other management reports the "suspense" account would have management reports (how well are the people hose job it is to resolve these mysteries doing)
> In other words, Imbalance/Orphan is for can't put where it goes now (and maybe unsure exactly should be) but the transaction is understood. "Over and Short" is a proper account just like "bad debt" is. "Suspense" is for immediately recording money in (not losing a check behind somebody's drawer) even though the transaction will need research to be entered.
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