Which option corresponds to using plug accounts in intercompany elimination?

• A. Intercompany Plug Accounts
• B. Intercompany Accounts
• C. Intercompany Partners
• D. Elimination Consolidation Dimension member

Answer: (A)

Plug accounts are the mechanism used to isolate intercompany balances for elimination. In FCCS, when two entities transact with each other, those balances are posted to dedicated plug accounts in the consolidation ledger. The elimination process then offsets the plug account balances against each other so the intercompany activity does not affect the consolidated financial statements. This separation ensures the normal operational ledgers stay intact while the intercompany items cancel out during consolidation.

So the option that describes Intercompany Plug Accounts is the correct match because it names the specific accounts set aside purely for intercompany eliminations. Other choices refer to general intercompany accounts, relationships, or consolidation dimension members, which don’t capture the mechanism of routing and offsetting intercompany balances used specifically for elimination.