[GNC] Transaction Reconcile behavior differences

[Derek Atkins]

Hi,

On Tue, February 23, 2021 8:34 am, Peter S. Shenkin wrote:
> Perhaps I’m wrong about this (still a neophyte) but I have the idea that
> the accounting concept of reconciliation applies to external accounts.

Reconciliation is all about ensuring that your books match *something*
else.  It *usually* implies a Bank, Loan, Credit Card, etc statement, but
that's not necessarily always the case.  You could, for example, reconcile
an account against a pile of receipts, or invoices, or anything else. 
Personally I use reconciliation for my reimbursable business expenses (so
I know which transactions have been filed for reimbursement, and which
have been paid out).

> In GC 4.3, if a transaction is imbalanced, it show up with an “Imbalance”
> amount. Does this not suffice for internal account transfers?

Imbalance has nothing to do with reconciliation.  You get an Imbalance
amount whenever you have an imbalanced transaction.  Taking a step back,
ever transaction must balance, meaning the Debits and Credits sum to 0. 
This means every transaction must touch at least two accounts (a debit
account and a credit account).  For example, a basic transaction could
credit Liabilities:CreditCard and debit Expenses:Groceries.  This is also
labeled "Transfer Account" in the GnuCash register, and if you open the
L:CC account you'll see "E:Groceries" in the transfer account column.

If you try to enter a transaction without specifying the transfer account,
it will default to "Imbalance".  This is "bad" -- it means you have not
properly categorized your transactions.  So if you ever find transactions
in your Imbalance account, you should fix that.

Similarly, if you try to enter a multi-split transaction and attempt to
commit it before you are done, GnuCash will auto-balance it into
Imbalance.  Again, this is something you should fix.

Needless to say, none of this applies to reconciliation.

> External transactions as well have to be balanced within the accounting
> system and will show up as an imbalance if they are not, but in addition,
> have to be reconciled with the external account balances, if I understand
> “reconciliation” correctly.

While your conclusion is correct, the reasoning is not quite.  The goal of
reconciliation is to ensure your books match some statement or external
list of transactions.  IF you have internal transfers between virtual
accounts then yes, you should still reconcile those, even though they are
not on the bank's statement.  Why?  Because you want your reconciled
balance to be correct.  Also, you would want to ensure that if you View ->
Filter By -> Status to look for non-reconciled transactions, the
intra-bank transfers don't show up and muddy the waters.

Hope this helps,

-derek

> -P.
>
> On Tue, Feb 23, 2021 at 7:52 AM Derek Atkins <derek at ihtfp.com> wrote:
>
>> It is certainly possible that the behavior changed between 3.2 and 4.2
>>
>> -derek
>> Sent using my mobile device. Please excuse any typos.
>> On February 23, 2021 7:38:59 AM John Nickell <jcnickell at gmail.com>
>> wrote:
>> > I believe on Linux I was running 3.2 (last note that I have which
>> > references a version), but I did a destructive update and can't
>> confirm
>> > that now. On Windows I'm running 4.2
>> >
>> > On Tue, Feb 23, 2021 at 6:17 AM Derek Atkins <derek at ihtfp.com> wrote:
>> > What version were you using on Linux?
>> > What version on windows?
>> > Most likely this is a change of behavior due to different gnucash
>> versions
>> > and not change of OS.
>> >
>> > -derek
>> > Sent using my mobile device. Please excuse any typos.
>> >
>> > On February 23, 2021 7:14:40 AM John Nickell <jcnickell at gmail.com>
>> wrote:
>> >
>> >> I recently switched from GnuCash on Linux Mint to GnuCash on Windows.
>> I
>> >> brought the same GnuCash data file over between computers.
>> >>
>> >> My checking account is setup in GnuCash as a parent account with
>> multiple
>> >> sub accounts to the checking account.
>> >> When reconciling (including sub accounts) on Linux if I selected a
>> >> transaction that had multiple splits or was simply a transfer among
>> sub
>> >> accounts, all of the transaction splits that were part of that same
>> >> transaction would also be marked as reconciled. (i.e. their box would
>> be
>> >> checked and the reconcile balance would reflect a $0 change.)
>> >>
>> >> When reconciling on Windows I'm having to reconcile each split
>> individually
>> >> and if the transaction is between two sub accounts within the
>> checking
>> >> account I must reconcile both the debit and the credit action
>> separately.
>> >>
>> >> Is this expected and desired on the Windows version of GnuCash, or is
>> there
>> >> a setting I'm missing so that a reconciling "part" of a transaction
>> >> reconciles all of the transaction within the account?
>> >>
>> >> I'm not looking for a reconciliation in my checking account to
>> reconcile
>> >> the transaction split in the savings account, but for transaction
>> splits
>> >> that are within the same parent checking account being reconciled I'd
>> like
>> >> to see similar behavior as I saw on the Linux version. Or at least
>> >> understand this is 'expected'.
>> >>
>> >> I've made pretty heavy use of these split transaction types and this
>> >> unexpected difference in transferring OS's has slowed down my
>> >> reconciliation process.
>> >>
>> >> If an example helps:
>> >> I us a single transaction to transfer a $1000 paycheck into three sub
>> >> accounts. $300 for Automobile, $500 for Savings, $200 for Food.  All
>> are
>> >> still within the same parent checking account. In Linux checking the
>> box to
>> >> reconcile the $200 food transaction would also check the Automobile,
>> >> Savings and $1000 split.  In my experience with Windows all 4
>> transaction
>> >> splits must be "checked" individually.
>> >>
>> >> Checking
>> >>>> Food
>> >>>> Automobile
>> >>>> Savings
>> >> Thanks
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> --
> -P.
> Sent from a cell phone. Pls forgive brvty and m1$tea at ks.
>


-- 
       Derek Atkins                 617-623-3745
       derek at ihtfp.com             www.ihtfp.com
       Computer and Internet Security Consultant