Which processes are involved in the monthly close for intercompany reconciliation?

• A. Collecting external financial statements
• B. Reviewing transactions and generating reports
• C. Matching entries and making adjustments
• D. B and C only

Answer: (D)

In the context of monthly close for intercompany reconciliation, the processes involved are crucial for ensuring accurate and timely financial reporting across different entities.

The answer focuses on reviewing transactions and generating reports alongside matching entries and making adjustments. Reviewing transactions allows companies to confirm that all intercompany exchanges are recorded properly, whereas generating reports provides essential summaries that aid in understanding the overall financial position across the organizations involved.

Matching entries is another vital process, as it ensures that the transactions recorded by one entity are mirrored by the corresponding entries in the other entity's accounts. This step helps to identify any discrepancies. Making adjustments is necessary when mismatches or errors are discovered, allowing entities to reconcile their accounts accurately.

Collecting external financial statements, while a component of the broader financial closing process, does not specifically pertain to the intercompany reconciliation activities. It is more aligned with the consolidation of financial results at the corporate level rather than the specifics of intercompany transaction matching and adjustments.

Thus, the correct answer emphasizes the essential elements of reviewing transactions and matching entries as integral parts of the intercompany reconciliation process during the monthly close.