If I had MNC company name SG Group whose operating from various countries.
Suppose SG India receive a service bill on behalf of SG UK, then what will the Bill booking entry in SG India along with how SG India will book and claim the from SG UK.
Please share me the Journal entries for above transaction in bothe books.
Here are the journal entries for the transaction: *SG India (Receiver of Service)*
1. Debit: Service Receipt Expenses (or relevant expense account) = XXX (invoice amount) Credit: SG UK (inter-company payable) = XXX
2. Debit: SG UK (inter-company receivable) = XXX Credit: Service Receipt Expenses (or relevant expense account) = XXX (reversing entry) *SG UK (Provider of Service)*
1. Debit: SG India (inter-company receivable) = XXX Credit: Service Revenue (or relevant income account) = XXX
2. Debit: Cost of Services (or relevant expense account) = XXX (cost incurred by SG UK) Credit: Service Revenue (or relevant income account) = XXX (reversing entry)
Note: - XXX represents the invoice amount. - Inter-company payable/receivable accounts are used to track transactions between group companies. -
Reversing entries are made to eliminate the impact on the financial statements.
Naveen Fintech Pvt Ltd
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
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