Inter company balances-group accounts, Financial Accounting

Assignment Help:

Inter Company balances

One of the companies may appear as receivable (debtor) or payable (creditor) in the other company’s books. Just like in accounting four branches, such inter-company balances should be excluded from the consolidated balance sheet.

The following situations may therefore apply:

a) If the inter-company balances are directly opposite and equal ie a receivable in one companies books is the same as the payable in the other company books and these amounts are included in the receivables and payables of the group.

DR.  Group accounts payables
       CR. Group accounts receivable

(with the full amount due from one company to the other)

If the amounts due from one to the other are shown as separate amounts referred to as current accounts then the amounts or balances are simply ignored and not included in the consolidated balance sheet.

b) If the inter-company balances are directly opposite but not equal then the first step will be: To make them equal by adjusting the holding companys balances.


Related Discussions:- Inter company balances-group accounts

Complete the cash flow spreadsheet, This lab assignment will correspond to ...

This lab assignment will correspond to developing a cash flow budget with an operating loan. There is on lab exercise listed below. Additionally, there are two assignment questions

Pooling and duplication of deductions, Individual taxpayers who don't itemi...

Individual taxpayers who don't itemize their deductions are entitled to a standard deduction amount by which to decrease ADJUSTED GROSS INCOME in arriving at taxable income. Amount

Explain the term level of detail - financial accounting, Level of detail ...

Level of detail Financial accounting reports provide users with a comprehensive overview of performance and position of business for a period. Consequently, information is aggr

Assignment, 1- Journalize May transactions. Entry: 1. May 1 Owner H.Hadi...

1- Journalize May transactions. Entry: 1. May 1 Owner H.Hadi invested $40,000 in the business. 2. May 4 Equipment was purchased at a cost of $7,000; a three-month, 10% note pa

Preparation of cashflow statements, Preparation of cashflow statements ...

Preparation of cashflow statements IAS 7 recommends that the cashflow statement can be prepared using two methods:- I) Direct method Whereby, cash from operations is deter

Fair value adjustments, explain the purpose and circumstances of using fair...

explain the purpose and circumstances of using fair values in preparing consolidated financial statements

Different powers of investment-trust laws and accounts , Powers of investme...

Powers of investment 1. Shares and debentures:  A trustee may: Invest in bearer securities if these would otherwise be authorised;    Acquiesce in an amalgamation

Analysis of potential arrangement with supplier, At current the working cap...

At current the working capital cycle is Receivables days $0.4m/$10m * 365 = 15 days Inventory days $0.7m/$8m * 365 = 32 days (cost of sales = $10m - $2m) Payables days $1.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd