Report arithmetic also known as totalto structure, refers to the way amounts are totaled on reports. You completely control the report arithmetic for a set of books with the total to and normal balance fields of accounts.
The name of any other account can be entered in a total to field of an account. Changes to the account then total automatically, and instantly, to the total to account specified. If that account in turn totals to another account, the change ripples onward until an account with blank total to fields is updated. In this way, reports always reflect changes to amounts that result from transactions being added, edited or deleted. You can easily understand the entire reporting structure of any set of books by looking at the totalto_kids explorer window for total accounts that don't total anywhere themselves.
An account can total to another account on the same report, or to an account on any other report. The ability to total an account on one report to an account on another report is the foundation of integration in NV2. For instance, you total the change to retained earnings on the income statement to retained earnings on the balance sheet to reflect this important relationship automatically. Integration also provides the ability to automatically total amounts from all subsidiary ledgers and schedules directly to controlling accounts on financial statements or other subsidiary reports. As a result, a set of books is potentially unlimited in size and structure, and is fully integrated in real time.
Rippling stops at an account with blank total to fields. As an example, in a simple set of books two accounts on the balance sheet have blank total to fields. These are the accounts used for total assets and total liabilities and equity, and they contain the amounts that make the balance sheet balance. Therefore, in this case, rippling stops only when one side or the other of the Fundamental Accounting Equation has been reached.
Every account must have either a debit or credit normal balance. When you add an account, the normal balance field is filled in with appropriate normal balance for that type of account.
When you add accounts to reports, you do not have to fill in the total to fields right away. You can add all your accounts first, then fill in the total to fields later to set up your report arithmetic. In fact, report arithmetic can be changed at any time by editing the account names in total to fields. All effects on accounts due to rippling are undone and redone automatically by NV2 to ensure that changes are instantly reflected by all reports and accounts.
For more information see Totalto Structure.