Sunday 20 May 2012

Bookkeeping for two entities

Hi Platinum,

I will go to an interview this Friday. They require the bookkeeper to have experience with inter company accounts and understand how to balance with journal entries for each entity.

I understand 2 units under one entity can have transactions with each other, they can sell inventory or service to each other. And when doing the consolidated financial statement, we have to eliminate the effect of the intercompany transactions so we won't overstate the sales or profit. 

Is that right? Can I add something to make my answer more impressive if they ask this question?

And also, the interviewer is a training school, a registered training organisation, do you have any suggestions on my interview preparation for this kind of entity?

Really thank you for reading this email,

Your response will be appreciated, 

Regards,

Veronica

2 comments:

  1. Hi Veronica,

    Good to hear that you are making progress on your job hunting.

    For inter-co transactions, there are usually two different types of scenarios, one is the inter-co sales which you mentioned below, the other one is the inter-co loan. You will have to make sure both types of transactions are eliminated before consolidation.

    I would recommend you to should revisit your uni Corporate Accounting textbook to memorise the general entries before interview. Also in future, if time allows, I would recommend you to take our level 2 training which will cover all the details regarding inter-co transactions.

    For the accounts of a training school, I believe they will have stock/inventory (text books, training materials) related transactions too. It would be a good idea to look into those as well.

    Good luck with the interview and bring back some good news.

    Regards,

    Florian

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