Consolidation of Accounts – Trial Balance
What is the meaning of Consolidation of Trail Balance?
Companies use Trial Balance as a means to understand the Financial Position of the Company as compared to the Previous Financial Year. The transactions of any financial year across all ledger codes will be available in the Trial Balance. Any company will be able to mitigate the problems by finding out various transactions & correct them to present a correct & accurate Accounting Data for any Company
For ex: the below Organizational Chart presents as to how Trial Balances should get their accounts consolidated
| Company – ABC Holding Company | ||
| Company – EFG Group Company | ||
| Company – DEF Group Company – Transactions to be posted (Subsidiary) | ||
| Company – POI Group Company – Transactions to be posted (Subsidiary) | ||
| Company – QWE Group Company | ||
| Company – XYZ Group Company – Transactions to be posted (Subsidiary) | ||
| Company – LKG Group Company – Transactions to be posted (Subsidiary) |
** Transactions will be posted in Subsidiaries Companies
** Consolidation Report: If we run a Trial Balance for “Company – EFG Group Company”, then the total of
a. Company – DEF Group Company – Transactions to be posted (Subsidiary)
b. Company – POI Group Company – Transactions to be posted (Subsidiary)
Will need to be consolidated & shown in Trial Balance
Company – DEF Group Company
| Account Code | Particular | Debit | Credit |
| 30001 | Sundry Debtors | 10000 | |
| 40001 | Revenue | 10000 | |
| 50001 | Purchase | 2500 | |
| 20001 | Sundry Creditors | 2500 | |
| Total | 12500 | 12500 |
Company – POI Group Company
| Account Code | Particular | Debit | Credit |
| 30001 | Sundry Debtors | 15000 | |
| 40001 | Revenue | 15000 | |
| 50001 | Purchase | 5000 | |
| 20001 | Sundry Creditors | 5000 | |
| Total | 20000 | 20000 |
Trial Balance of “Company – EFG Group Company” will appear as follows
| Account Code | Particular | Debit | Credit |
| 30001 | Sundry Debtors | 25000 | |
| 40001 | Revenue | 25000 | |
| 50001 | Purchase | 7500 | |
| 20001 | Sundry Creditors | 7500 | |
| Total | 32500 | 32500 |
Odoo Accounting module helps you to manage all your accounting entries easily.
