Which of the Following Events Is an Intercompany Transaction That

question 47

Multiple Choice

Which of the following events is an intercompany transaction that requires the deferral and later recognition of income?

• A)accrual of rentals on a lease of real property owned by one group member that is used by another group member; both group members use the accrual method of accounting
• B)cash dividend payment from a subsidiary corporation to its parent corporation
• C)sale of inventory from a subsidiary corporation to its parent corporation
• D)None of the above transactions require the deferral and later recognition of income.

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Definitions:

Industrial Averages

Statistical measures that represent the performance of the industrial sector within an economy, often used as indicators for stock market trends.

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Accounting Statements

Financial documents that summarize the financial status and performance of a company, including the balance sheet, income statement, and cash flow statement.

Corporate Income Tax

A tax imposed on the net income or profit of corporations, calculated as a percentage of their earnings.