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Categories >> Accounting >> Taxation
 
 


 

 
 Audit interview questions  Audit Interview Questions (427)
 CompanyAffairs CS interview questions  CompanyAffairs CS Interview Questions (158)
 Taxation interview questions  Taxation Interview Questions (1897)
 Accounting General interview questions  Accounting General Interview Questions (2805)
 Accounting AllOther interview questions  Accounting AllOther Interview Questions (4359)
Question
What is Inter Company Reconciliation?
 Question Submitted By :: Taxation
I also faced this Question!!     Answer Posted By  
 
Answer
# 1
Intercomany reconciliation is reconciling between the two
branches of the same company located in multiple locations.
where as one branch acts as seller to other branch when
some product is moved from Branch A to B branch.
Eg:- when Branch A sends some products to Branch B then in
this case. Branch A becomes the seller and Branch B becomes
the purchaser.

Hence we need to reconcile between these two branches to
ensure the right figures appear on the financial statments
to the management
 
Is This Answer Correct ?    191 Yes 8 No
Chandra Kumar.m
 
Answer
# 2
Intercommany Reconciliation is done for the paurchase or
sale of goods/services between two legal entities of a
parent company.

Reconciliation is done to find out the difference of amount
posted in the books of both legal entities.

For example: B ltd (France) and C ltd (America) are two
legal entities of a parent company XYZ ltd.

Now, B sold good to C for $1,000.00 and recorded the entry
in their book. However, C ltd when recieved the goods,
recorded the transaction for $960.00 only because of change
in currency.
While doing reconciliation it was found that there is a
difference of $40.00, so the system would record it as
adjustment entry for $40.00 to balance the ledger.
 
Is This Answer Correct ?    56 Yes 14 No
Vivek Dubey
 
 
 
Answer
# 3
Just to put in simple words about the Inter comapny
reconciliation process, it is a reconciliation between the
recievables and the payables among two branches of a
company to make sure there is no cash loss within the
Business entity and to make sure if they have any
discrepancies, the reason for the difference. Also Inter
company reconciliation keeps a record of the financial
status of a branch updated on a given period.
 
Is This Answer Correct ?    27 Yes 1 No
Uday Mantur
 
Answer
# 4
Transaction between subs of one parent co. are called inter
co. transactions.
By reconciling inter co. we mean to assure and authenticate
the balances of booth subs i.e. wheather subs have booked
equal nos and quantity in their respective books or not.
 
Is This Answer Correct ?    43 Yes 18 No
Sunny Ahuja
 
Answer
# 5
Intercompany (IC) reconciliation rules balance transactions
that occur between different entities in the company. IC
reconciliation adjusts for differences in the values that
are recorded by the buyer entity and the seller entity for
intercompany transactions. If, after adjustments for
currency differences, the recorded values do not match, IC
reconciliation creates balancing entries
 
Is This Answer Correct ?    15 Yes 4 No
Chaya.h.g
 
Answer
# 6
It is a act of confirming that for any trade happened b/w
two sister concerns/entities, the account balances in the
books of both the entities should match.
 
Is This Answer Correct ?    9 Yes 2 No
Vishal
 
Answer
# 7
I think the question can best be answered with example :

Suppose Parent company has Branch in India as well in UK .

UK Branch engages India branch to work on a contract which
UK is having with its UK Client. At the end, Uk branch
would Invoice UK client say ie GBP 100 and share GBP 30
with India , India books Invoice GBP 30 to UK Branch @75 fx
on 16th of Month , India books would hit with 30 X 75=INR
2250 as Indian books needs to be prepared in INR.

At the end of Month UK branch shows 30 GBP as Payable ,but
at the end of Month if rate becomes 1GBP=INR80 , so india
books will show 28.125 GBP ( 2250/80) as receivables since
A/R is Balance sheet item and needs to be shown at Balance
sheet rate.

So here comes Intercompany reconciliation , we need to show
30 GBP as payables in UK books and GBP 30 in Indian books .

So post a fx entry of INR 150 thereby Dr A/R account and Cr
Fx A/c or some control a/c so as to reflect A/R in India
books as INR 2400 ( equivalent @80 to GBP 30).
 
Is This Answer Correct ?    10 Yes 4 No
Gaurav
 
Answer
# 8
intercompany means transaction b\w two entities 
Is This Answer Correct ?    6 Yes 2 No
Bala
 
Answer
# 9
Not only confirming the balance. Its a book closure
activity enlightning the true and fair view of Balance
Sheet and Income Statement. E.g. I sold to my down
company. Will shown this is my outstanding income or
asset. Hence balance should make it to zero while
preparing the balance sheet and income statement
 
Is This Answer Correct ?    4 Yes 5 No
Dinesh
 
Answer
# 10
Transaction that takes place between two entities of same
company is simply called as intercompany. Reconciliation of
inter company means that reconciling the books of both the
entities and making the balances to be zero by internal
adjustment,making sure that there is no any cash
transactions takes place between both the entires its just
an adjustment between two entities.
 
Is This Answer Correct ?    21 Yes 23 No
Raj
 

 
 
 
Other Taxation Interview Questions
 
  Question Asked @ Answers
 
Igave a cheque of Rs 25000/- to a Professional. Do I deduct TDS on Rs 25000/, then after three months I further pay the same Professional Rs 40000/-.Have I to pay Tds on 25000 Or Rs 65000/- or only Rs 40000/-,Have I to pay interest on delayed payment for Rs 25000/-?   3
What is the Special provision for computing profits and gains of business of civil construction GET-Engineering-Construction 3
Give some examples under sec. 80C? What is the maximum limit ? OPI-Global 6
TDS IS TO BE DEDUCTED ON WHICH AMOUNT - THE INVOICE AMOUNT OR THE INVOICE AMOUNT PLUS TAXES (SALES/SERVICE TAX)? Progressive 3
(1)what is last date of monthly TDS challan deposit (2) what is last date of TDS quarterly Return filling First-City 32
Can i take service tax on freight outward.   6
Who is exempted from registration and payment of tax under AP VAT ACT   1
how will you make vat returns?   1
we have received " c" form against full rate of tax i.e 12.5% from the customers can we summiting in sales tax department for taken a refond as consisnal rate i.e 2% sale against "c" form , but party hasebeen mantion on the back side of from all value inclusive of taxes i.e full rate of tax can we utilised this form for consosnal rate ?   1
IF I DIDNT FILL TDS RETURN I PAYING ALL TAX WHAT IS THE PROCEDURE   2
Can TDS be deducted without the minimum exemption. for rent if annual rent is 1,50,000 then calculate TDS.   4
Is sales tax payable on commodities on rental   2
 
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