due to due from intercompany transactions

The following lines are entered into the general journal and posted. The voucher contains two destination companies, DEMF and USSI. (It can be entered on any line of the voucher, whether at the beginning or at the end.) An intercompany relationship must be defined between the originating company (active company) and the destination companies (all other companies on the voucher). Note that the active company is always considered the originating company, and it must exist on at least one line of a voucher. The following scenarios provide examples. (However, the sum of debits equals the total credits.)īecause of this flexibility, the posting logic can't reliably enter default financial dimension values when multiple lines are entered. The amounts of individual debits might not match individual credit amounts.Lines can be summarized for both the originating company and the destination company.The intercompany transaction can contain more than one destination company.The reason for this loss is the flexibility of journals, which allows for the following behavior: However, if the intercompany transaction is entered on multiple lines, the ability to identify which debit or credit from the originating company should be matched to the offsetting debit or credit from a destination company is lost. If the intercompany transaction is entered on a single line, the debit/credit pair can easily be determined, because it's clearly identified by using the account and offset account. When an intercompany transaction is entered, the pairs of related debit and credit values for each company must be known. Why does the defaulting behavior work differently? Answer However, when an intercompany transaction is entered on multiple lines, default financial dimension values aren't correctly entered. When an intercompany transaction is entered on a single line, default financial dimension values are correctly entered on the Due to and Due from ledger accounts. Intercompany transactions can be entered as either a single line or multiple lines on various financial journals, such as the general journal, the vendor invoice journal, and vendor/customer payment journals.

This article answers some commonly asked questions regarding intercompany journals and dimension values.

Due to due from intercompany transactions