Cima F2 Exam Question No 47

Question No 47:

What is intra-group balances?

Cash in transit - Cash has been sent by one group company, but has not been received and so is not recorded in the books of the other group company. The following adjustment will be required: Cr Receivables (with the higher amount) Dr Bank (with the amount in transit i.e. the difference) Dr Payables (with the lower amount);

Goods in transit - Goods have been sent by one company, but have not been received and so are not recorded in the books of the other group company. The following adjustment will be required: Cr Receivables (with the higher amount) Dr Inventory (with the amount in transit i.e. the difference) Dr Payables (with the lower amount)