Let's look at the top figure. Balances of subsidiary accounts for every Business Entity (BE) corresponding to the initial cycle on the left are shown in the table below.

BE	Accounts Receivable	Subsidiary account	DEBIT	Accounts Payable	Subsidiary account	CREDIT
A	A’s AR account	C’s local customer ID	300	A’s AP account	B’s local vendor ID	100
B	B’s AR account	A’s local customer ID	100	B’s AP account	C’s local vendor ID	200
C	C’s AR account	B’s local customer ID	200	C’s AP account	A’s local vendor ID	300

Journal entries reflecting cycle’s reduction for those businesses may look like (POST REF column is hidden):

BE	Date	Ledger account	Subsidiary account	ACCOUNT TITLES AND EXPLANATION		DEBIT	CREDIT
A	YYYYMMDD	AP acct No.	B’s vendor ID	AP for B		100
		AR acct No.	C’s customer ID	AR for C			100
				ARMO:DT= 1,CR= 1
B	YYYYMMDD	AP acct No.	C’s vendor ID	AP for C		100
		AR acct No.	A’s customer ID	AR for A			100
				ARMO:DT= 1,CR= 1
C	YYYYMMDD	AP acct No.	A’s vendor ID	AP for A		100
		AR acct No.	B’s customer ID	AR for B			100
				ARMO:DT= 1,CR= 1

Explanations beginning with “ARMO:” show cycles’ numbers in which DT and CR values were accumulated. DT/CR values reduce correponding AP/AR balances when transactions are posted--see reduced cycle on the right (zeroed edge not shown) and the table below.

BE	Accounts Receivable	Subsidiary account	DEBIT	Accounts Payable	Subsidiary account	CREDIT
A	A’s AR account	C’s local customer ID	200	A’s AP account	B’s local vendor ID	0
B	B’s AR account	A’s local customer ID	0	B’s AP account	C’s local vendor ID	100
C	C’s AR account	B’s local customer ID	100	C’s AP account	A’s local vendor ID	200

Introduced here ARMO transaction reduces all AP and AR without any money transfers.

In case with large amount of BEs and long cycles of obligations their possible reduction may be accomplished by means of an information system developed for that purpose. This example displays a result generated by the System prototype.