Page 341 - F1 Integrated Workbook STUDENT 2018

Consolidated Statement of Financial Position

3.9 Intra-group balances

These must be eliminated in full. These could be either:

 current accounts (receivables/payables) or

 intra-group loans.

Intra-group balances may not agree due to cash or goods in transit. These items
must be dealt with first as follows.

Cash in transit Goods in transit

Dr Bank (increase) Dr Inventory (increase)

Dr Payables (decrease) Dr Payables (decrease)

Cr Receivables (decrease) Cr Receivables (decrease)

Only once the CIT or GIT has been accounted for can you then go ahead and post a
contra adjustment to remove the remaining inter-group balances.

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