You have the following hierarchy and intercompany transactions: How many elimination entities are generated?

The correct answer is C. 3. There are 3 elimination entities generated. The elimination entities are created at the lowest common parent level in the hierarchy where intercompany transactions occur. In this case, E1 is the parent of C1 and C2, E2 is the parent of C3 and C4, and E3 is the parent of C5…

Intercompany Reconciliation and Elimination

Question

You have the following hierarchy and intercompany transactions:

How many elimination entities are generated?

Exhibit

Options

How the community answered

(50 responses)

A
10% (5)
B
18% (9)
C
68% (34)
D
4% (2)

Explanation

There are 3 elimination entities generated. The elimination entities are created at the lowest common parent level in the hierarchy where intercompany transactions occur. In this case, E1 is the parent of C1 and C2, E2 is the parent of C3 and C4, and E3 is the parent of C5. Thus, three elimination entities are generated.

Topics

#elimination entities#intercompany elimination#group hierarchy#entity generation

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