interim account in fin statement

[Former Member]

hi,

1)may i know what is the role of interim account like adjustment account, clearing account, settlement account in financial statement? they play the role as either receivable or payable provision before they are adjusted to main account?

2)how does it impact the financial statement?

thanks

[Former Member · Accepted solution]

Yes you are right as to the role they play is of either receivable or payable provisions before they are posted to main account. These are required in the system mainly due to excellent integration and real time transaction postings.

In financial statements these accounts need to be put along side the main accounts. E.g.

Total AP = Balance in Main A/P A/c + Balance in A/P Clearing A/c

The same principles apply to other accounts as well.

Hope the concept is clear!

Ambadas