Cost Recharge Intercompany

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.