Clarification on Opening Balance Contra Account
I recently began working on the Mifos X platform and I would like some
clarifications with respect to migrating opening balances.
Before migrating opening balances one will need to create an opening
balance contra account which is then linked to financial activity.
So I will like to know the reason for these opening balance contra accounts
because based on some knowledge, if the corresponding accounts are debited
(for instance cash-50,000) and credited (regular savings-20,000 and
equity-30,000) won’t this equally work as well without having to make use
of the opening balance contra account? Or if they are brought forward
amounts, why are they linked to financial activities?