events = []

id = "ledger-a-child-account-has-its-parents-type"
title = "An account under a parent has the parent's type"
rule = "An account MUST be one of the five elements (asset, liability, equity, revenue, expense), and an account under a parent MUST have its parent's type, so a rollup never mixes elements."
status = "AUTHORITY"
sources = [
  "FASB Concepts Statement 8, Ch. 4, E16, E37, E61, E80, E81: the five elements (docs/spec/sources/fasb-asc.md)",
  "CHOICE, the owner, 2026-10-13 (docs/spec/rules.md B-4): a child takes its parent's type",
]
tags = ["accrual", "book", "us", "ledger", "chart"]

[setup]
currency = "USD"
fiscal_year_start = "01-01"
basis = "accrual"
rounding = "half-even"

[[setup.accounts]]
code = "6000"
name = "Operating"
type = "expense"
header = true

[[setup.accounts]]
code = "6150"
name = "Software"
type = "expense"
parent = "6000"
tax_category = "office_expense"

[[setup.accounts]]
code = "1000"
name = "Cash"
type = "asset"

# A revenue account under an expense header would mix two elements.
[[expect]]
query = "add_account"
account = { code = "6200", name = "Refunds", type = "revenue", parent = "6000", tax_category = "gross_receipts" }
refused = "parent_type_mismatch"

# An expense under the expense header is a child of the same element.
[[expect]]
query = "add_account"
account = { code = "6200", name = "Hosting", type = "expense", parent = "6000", tax_category = "office_expense" }
accepted = true

[[expect]]
query = "trial_balance"
as_of = "2026-12-31"
[expect.values]
"6000" = "0.00"
"6150" = "0.00"
"1000" = "0.00"