Intercompany Accounting in Dynamics 365 Finance: Main Account Types for Due to and Due from Accounts

Main Account Types for Intercompany Accounting in Dynamics 365 Finance

Question

You are configuring intercompany accounting for a multicompany enterprise.

You need to set up the Due to and Due from accounts.

Which main account type should you use?

Answers

Explanations

Click on the arrows to vote for the correct answer

A. B. C. D. E.

C.

References: https://docs.microsoft.com/en-us/dynamics365/unified-operations/financials/general-ledger/intercompany-accounting-setup.

When setting up intercompany accounting for a multicompany enterprise, the Due to and Due from accounts are used to record intercompany transactions between the different companies. These accounts are used to track the amount of money owed between the companies.

The main account type that should be used for the Due to and Due from accounts is the Balance sheet account type. This is because the Due to and Due from accounts represent an amount owed by one company to another, which is a liability on one side and an asset on the other side of the transaction.

Option A (Profit and loss) and Option B (Expense) are not appropriate account types for the Due to and Due from accounts because they are used to track revenue and expenses, which are not relevant for intercompany transactions.

Option D (Liability) is partly correct but incomplete, as the Due to account is a liability account, but the Due from account is an asset account.

Option E (Asset) is partly correct but incomplete, as the Due from account is an asset account, but the Due to account is a liability account.

Therefore, option C (Balance sheet) is the most appropriate main account type to use for the Due to and Due from accounts when configuring intercompany accounting for a multicompany enterprise.