Transactions

In big companies, there are many subsidiaries, associates and joint ventures.

Suppose Company A is the subsidiary of B.

Company A sales goods to Company B worth Rs. 1 Lakhs.

In books of A, B will be shown as debtor as Rs. 1 Lakhs and in books of B, A will be shown as creditor as Rs. 1 Lakhs.

at the time of consolidation, the above both debtor and creditor will be knocked off with each other.

(The above transaction is intra group transactions means any transaction within group companies.)

Thanks

Sanjeet (sksanjeet38 @ gmail.com)