Define Intercompany Transaction

In respect of Account Receivable how do you define Intercompany Transaction?

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Before discussing the question firstly we understand the term Intercompany transactions. Intercompany transactions are the transactions which takes place between two or more entities of the same group of company. Therefore, receivable of one entity would be payable of other entity. Every intercompany transaction is eliminated before preparing the final Balance sheet of the group company.

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