Intercompany elimination accounts are general ledger accounts used to keep accounts balanced between multiple companies.
Intercompany elimination accounts are often referred to as intercompany accounts, or as due to or due from accounts.
These accounts are only used if you are using multiple companies. After consolidation for the companies, the intercompany accounts should always net to zero.
Example Your corporate structure is made up of two companies: Company A and Company B. Company A sells a product to Company B for $100. As a result of this transaction, Company A has an intercompany account debit of $100 and Company B has an intercompany account credit of $100.