What constitutes a 'matching transaction' in ICMR?

• A. A transaction with no counterpart
• B. A transaction that appears only once
• C. A transaction with a corresponding one in another company code
• D. A transaction verified by an external auditor

Answer: (C)

A 'matching transaction' in the context of ICMR (Intercompany Matching and Reconciliation) is defined as a transaction that has a corresponding one in another company code. This means that for the intercompany reconciliation process to work effectively, transactions need to be matched between different entities within the same organization.

When two companies within the same corporate structure carry out a transaction, such a transaction should ideally have a mirror entry in the accounting records of both entities. This matching allows for accurate financial reporting, proper elimination of intercompany transactions in consolidated financial statements, and ensures that both parties are on the same page regarding amounts owed or due.

When practitioners analyze these transactions, they seek to ensure that the entries balance and correlate with each other in terms of amounts and descriptions. This matching process is essential for identifying discrepancies and resolving them before finalizing financial statements. In summary, the essence of a matching transaction is the existence of related entries across separate but interconnected entities within a corporate group, ensuring that intercompany balances are properly reconciled.