Which of the Following Statements Is Correct

question 3

Multiple Choice

Which of the following statements is correct?

• A) All intragroup transactions have an impact on the NCI share of equity.
• B) Transactions that do not affect profit will not give rise to an adjustment to the NCI.
• C) When the parent entity sells inventories to its subsidiary, a consolidation adjustment needs to be recorded to reduce the NCI.
• D) The NCI is not entitled to share the group's profit.

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Definitions:

Close Corporation

A type of business corporation that is privately held, with a limited number of shareholders and restrictions on share transfers.

Shares

Units of ownership interest in a corporation or financial asset, providing a proportionate claim on the company's assets and profits.

Few Persons

A term not widely used in a specific financial or legal context; generally, it refers broadly to a small number of individuals.

Commingles

The act of mixing or combining funds or properties in a way that makes them indistinguishable from one another.