Question

Your customer wants to use a clearing company to automatically balance intercompany entries. Which three statements are true regarding the use of a clearing company value?

a) Clearing companies are not supported.
b) You must map legal entities to balancing segment values in order to use a clearing company.
c) If you choose to use a clearing company, you can define a default clearing company value or select the clearing company value directly in the general ledger journal.

Answer 1

To use a clearing company to automatically balance intercompany entries, you must map legal entities to balancing segment values, and you can define a default clearing company value or select it directly in the general ledger journal.

Step-by-step explanation:

The three statements true regarding the use of a clearing company value are:

1. You must map legal entities to balancing segment values in order to use a clearing company. This ensures that the intercompany entries are properly balanced.
2. If you choose to use a clearing company, you can define a default clearing company value or select the clearing company value directly in the general ledger journal. This allows flexibility in choosing how to handle intercompany entries.

Regarding statement a) Clearing companies are not supported, this statement is false. Clearing companies are indeed supported to automatically balance intercompany entries.