Would Someone Please Explain The Process Of Closing Dual Division Company Books Including All Eliminating Journal Entries For Receivable And Payable Accounts And Any Other Accounts That I Maybe Overlooking?

To close the nooks first each division must have all of their respective equity, financing, income and expense account transactions posted, reconciled and closed for the period in questions. Then after this is done the intercompany accounts (transactions between the two divisions, which should have been reconciled and closed in step-one) closed against each other which is simply offsetting the other so as not to reflect any transactions except those of the actual operations of the entity which owns both divisions. An example would be one division loans money to the other division. The loan and interest paid is offset by the payment of principle and interest to the other division. An other example would be a sale between the division. The cost-of-goods sold, account receivable or sale income would be offset by the inventory, account payable or payment made to the other division. All of these intercompany transactions need to be accounted for and removed in order to obtain a true representation of the entity as a wholes operations for the period.

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