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The Adjustment Entry is passed to eliminate the inter company owing is 1) Debit Amalgamation Adjustment and credit Debtors a/c 2) Debit Sundry Debtors a/c credit sundry creditors a/c 3) Debit sundry creditors a/c, credit sundry Debtors a/c 4) Debit sundry debtors account, credit statutory Reserve a/c?
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The Adjustment Entry is passed to eliminate the inter company owing is...
Adjustment Entry to Eliminate Intercompany Owing
Intercompany owing refers to the amount owed by one company to another company within the same group. The adjustment entry is passed to eliminate the intercompany owing, and there are different methods of doing this. The methods include:
Debit Amalgamation Adjustment and Credit Debtors Account
This method is used when two or more companies merge to form a new company. The amalgamation adjustment account is created to record the difference between the assets and liabilities of the merged companies. The adjustment entry for eliminating intercompany owing in this method involves debiting the amalgamation adjustment account and crediting the debtors' account.
Debit Sundry Debtors Account and Credit Sundry Creditors Account
This method is used when there is an outstanding balance between the debtors and creditors of the same group of companies. The adjustment entry for eliminating intercompany owing in this method involves debiting the sundry debtors account and crediting the sundry creditors account.
Debit Sundry Creditors Account and Credit Sundry Debtors Account
This method is used when there is an outstanding balance between the creditors and debtors of the same group of companies. The adjustment entry for eliminating intercompany owing in this method involves debiting the sundry creditors account and crediting the sundry debtors account.
Debit Sundry Debtors Account and Credit Statutory Reserve Account
This method is used when there is an outstanding balance between the debtors and creditors of the same group of companies, and the company wants to transfer the amount to the statutory reserve account. The adjustment entry for eliminating intercompany owing in this method involves debiting the sundry debtors account and crediting the statutory reserve account.
Conclusion
Eliminating intercompany owing is important to ensure accurate financial statements for the group of companies. The adjustment entry method used depends on the specific situation and the accounting policies of the company.
Intercompany owing refers to the amount owed by one company to another company within the same group. The adjustment entry is passed to eliminate the intercompany owing, and there are different methods of doing this. The methods include:
Debit Amalgamation Adjustment and Credit Debtors Account
This method is used when two or more companies merge to form a new company. The amalgamation adjustment account is created to record the difference between the assets and liabilities of the merged companies. The adjustment entry for eliminating intercompany owing in this method involves debiting the amalgamation adjustment account and crediting the debtors' account.
Debit Sundry Debtors Account and Credit Sundry Creditors Account
This method is used when there is an outstanding balance between the debtors and creditors of the same group of companies. The adjustment entry for eliminating intercompany owing in this method involves debiting the sundry debtors account and crediting the sundry creditors account.
Debit Sundry Creditors Account and Credit Sundry Debtors Account
This method is used when there is an outstanding balance between the creditors and debtors of the same group of companies. The adjustment entry for eliminating intercompany owing in this method involves debiting the sundry creditors account and crediting the sundry debtors account.
Debit Sundry Debtors Account and Credit Statutory Reserve Account
This method is used when there is an outstanding balance between the debtors and creditors of the same group of companies, and the company wants to transfer the amount to the statutory reserve account. The adjustment entry for eliminating intercompany owing in this method involves debiting the sundry debtors account and crediting the statutory reserve account.
Conclusion
Eliminating intercompany owing is important to ensure accurate financial statements for the group of companies. The adjustment entry method used depends on the specific situation and the accounting policies of the company.
Community Answer
The Adjustment Entry is passed to eliminate the inter company owing is...
I think the answer is option 3
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The Adjustment Entry is passed to eliminate the inter company owing is 1) Debit Amalgamation Adjustment and credit Debtors a/c 2) Debit Sundry Debtors a/c credit sundry creditors a/c 3) Debit sundry creditors a/c, credit sundry Debtors a/c 4) Debit sundry debtors account, credit statutory Reserve a/c?
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The Adjustment Entry is passed to eliminate the inter company owing is 1) Debit Amalgamation Adjustment and credit Debtors a/c 2) Debit Sundry Debtors a/c credit sundry creditors a/c 3) Debit sundry creditors a/c, credit sundry Debtors a/c 4) Debit sundry debtors account, credit statutory Reserve a/c? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about The Adjustment Entry is passed to eliminate the inter company owing is 1) Debit Amalgamation Adjustment and credit Debtors a/c 2) Debit Sundry Debtors a/c credit sundry creditors a/c 3) Debit sundry creditors a/c, credit sundry Debtors a/c 4) Debit sundry debtors account, credit statutory Reserve a/c? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The Adjustment Entry is passed to eliminate the inter company owing is 1) Debit Amalgamation Adjustment and credit Debtors a/c 2) Debit Sundry Debtors a/c credit sundry creditors a/c 3) Debit sundry creditors a/c, credit sundry Debtors a/c 4) Debit sundry debtors account, credit statutory Reserve a/c?.
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