As far as I can tell, it does one or both of:
1) If you enable it you can post incorrect (i.e. imbalanced) journals. And if you
disable it you ca not (i.e. all journals must balance - A GOOD THING, RIGHT)?
Option 1 is the correct one.If we enable it then we can post unbalanced intercompany
journals i.e debit <> credit for a balancing entity. For this we have to define
intercompany accounts in setup-->Accounts-->Intercompany accounts, which will
post the unbalance part to this intercompany account.
And if you disable it you cannot post the journals which are out of balance.