Automated Intercompany Cross Charge of Payables Invoices - Agreement Creation

Hello Team,

We are trying to implement the automated cross charge functionality from AP.

The transaction type we are testing has a onward flow to Receivables and then payables.

I have understood from the Oracle notes that an agreement must be created initially, however trying to understand why the original agreement also is creating AR and AP transactions as the original agreement uses the same transaction type. Can someone give me a clear example ?