Example of Using Multiple Balancing Segments
This simple example illustrates balancing along two balancing segments for a simple chart of accounts with three segments.
Scenario
Your company has a chart of accounts with two balancing segments and three segments, qualified as follows:
-
Company: Primary balancing segment
-
Cost Center: Second balancing segment
-
Account: Natural account segment
The following table shows a journal that was entered to transfer advertising and phone expense from company 1, cost center A to company 2, cost center B.
Line |
Account |
Debit |
Credit |
---|---|---|---|
1 |
Company 1-Cost Center A-Advertising Expense Account |
600 |
|
2 |
Company 2-Cost Center B-Advertising Expense Account |
600 |
|
3 |
Company 1-Cost Center A-Phone Expense Account |
800 |
|
4 |
Company 2-Cost Center B-Phone Expense Account |
800 |
The posting process creates journal lines to balance the entry across the primary and second balancing segments, company and cost center. The following table shows all of the journal lines, including balancing lines 5 through 8, which were automatically created.
Line |
Account |
Debit |
Credit |
---|---|---|---|
1 |
Company 1-Cost Center A-Advertising Expense Account |
600 |
|
2 |
Company 2-Cost Center B-Advertising Expense Account |
600 |
|
3 |
Company 1-Cost Center A-Phone Expense Account |
800 |
|
4 |
Company 2-Cost Center B-Phone Expense Account |
800 |
|
5 |
Company 1-Cost Center A-Balancing Account |
600 |
|
6 |
Company 2-Cost Center B-Balancing Account |
600 |
|
7 |
Company 1-Cost Center A-Balancing Account |
800 |
|
8 |
Company 2-Cost Center B-Balancing Account |
800 |