Balancing Accounting Dimensions

[deepeshgarg007]

Many companies follow Branch/Business Area wise accounting and create accounting dimensions for these.

Ideally, the trial balance report should have equal debit and credit values. When the TB report is viewed based on some accounting dimension filter, the total debit and credit values might not match as no debit credit balance is maintained.

For example, consider a simple journal entry where some amount is transferred from Branch 1 (Delhi) to Branch 2 (Mumbai), the GL Entries for this transaction might look as follows

Account/Ledger	Branch (Accounting Dimension)	Debit	Credit
Account 1	Delhi	₹0	₹10000
Account 2	Mumbai	₹10000	₹0

Now, let's say the trial balance report is viewed for the Mumbai branch, it will show a 10000 in debit and 0 in credit column.
Nothing is wrong with this but this defeats the purpose of a TB report since the values are not balanced. Any actual flaws might also be missed during an audit as the values are not balanced. A good accounting practice is passing a net zero entry in some common offsetting account to balance out the dimension-wise entries.

A provision for this can be added at the accounting dimension level to enable/disable this for specific dimensions. A common offsetting account at the company defaults table can be added as shown below.

Once this is enabled the GL Entries posted against the above-mentioned Journal Entries should be as follows

Account/Ledger	Branch (Accounting Dimension)	Debit	Credit
Account 1	Delhi	₹0	₹10000
Account 2	Mumbai	₹10000	₹0
Offset Account	Delhi	₹10000	₹0
Offset Account	Mumbai	₹0	₹10000

[deepeshgarg007]

Closed via #36149