Which of the Following Statements Is Incorrect

question 1

Multiple Choice

Which of the following statements is incorrect?

• A) Profits/losses on intragroup services are immediately realised to the group.
• B) It is necessary to have a tax-effect adjustment when adjusting for intragroup services.
• C) Adjustments for previous periods' intragroup services affect only statement of financial position accounts, but only if the fees have not been paid.
• D) Adjustments for current period intragroup services affect statement of profit or loss and other comprehensive income accounts and statement of financial position accounts if the fees have not been paid and only statement of profit or loss and other comprehensive income accounts otherwise.

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Definitions:

Equivalent Unit

A measurement used in cost accounting to represent the amount of work done on partially finished goods, expressed in terms of fully completed units.

Materials

Raw substances or components that are used in the production or manufacturing process to create goods or products.

Cost

Cost refers to the monetary value spent to acquire goods or services, including amounts paid for materials, labor, and other inputs required to produce or deliver the item.

Conversion Costs

Expenses incurred when converting raw materials into finished products, including labor and manufacturing overhead.