Companies sometimes have services that are charged to another company within their organization. For example, one company is for Roustabout services (WINGL). WINGL then bills the operating company (LEARN) for these services. When Consolidation (account level) or Combination (Sub-Account level) is used, the income and expense between these 2 companies have a net effect of zero. At the Consolidation or Combination level, management does not want to see those particular entries showing on the Income Statement.
The user creates a special “Elimination” company for these elimination entries. The user then creates a special journal in that company to make these types of transactions (or you can create entries in the Consolidated/Combination company).
We created a new company code ELIMN (normal type company) and created a special journal in this company for just this purpose. The entries in ELIMN are the reverse of those in LEARN and WINGL.
When the user prints the financial's, those entries will not show up on the Income Statement or the Balance Sheet.