According to Oracle documentation2, Oracle's recommended approach to easily create eliminating entries for intercompany activity when you have a large number of legal entities is to define an intercompany segment in the chart of accounts. The Intercompany module and the Intercompany balancing feature in general ledger and subledger accounting will automatically populate the intercompany segment with the balancing segment value of the legal entity with which you are trading. Therefore, option A is correct. Option B is incorrect because you do need to define an intercompany segment to easily create eliminating entries for intercompany activity. Option C is incorrect because you don't need to qualify the intercompany segment as the second balancing segment. You only need to qualify it as an intercompany segment. Option D is incorrect because you don't want to track the intercompany trading partner using distinct intercompany receivable/payable natural accounts. You want to use a separate intercompany segment for that purpose.