When paying intercompany accts in Comp A I enter the transaction as DUE TO/DUE FROM.
Then in the COMP B books I have to do a JE to move it to the appropriate acct.
Is the Due TO/Due FROM acct in Comp B a Credit and a Debit to the appropriate acct?
Just want to make sure it is entered correctly.
On Company A record:
- I/C Receivable from Company B (asset on B/S) >>> $10,000 (for example)
On Company B record:
- I/C Payable to Company A (Liability on B/S) >>> $10,000 (for example)
Note: whoever doing consolidation, will write I/C elimination entry and the balance becomes zero.