As the Inventory of a Firm Falls

question 201

Multiple Choice

As the inventory of a firm falls

• A) there is no change in its capital.
• B) its intangible capital decreases.
• C) its tangible capital decreases.
• D) its social capital increases.

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Definitions:

Intragroup Sale

Transactions of goods or services between companies within the same group, which may require elimination adjustments during consolidation.

Dividend Payable

A liability recorded on a company's balance sheet for dividends that have been declared but not yet paid to shareholders.

Dividend Receivable

The amount due to shareholders from declared dividends by the company in which they hold shares, recognized as an asset on the balance sheet until paid.

Elimination

The process of removing intercompany transactions when consolidating financial statements of a group.