Events That Trigger Recognition of Any Deferred Gain or Loss

question 10

Multiple Choice

Events that trigger recognition of any deferred gain or loss from intercompany transactions in its entirety include all of the following except:

• A)The termination of a contract between a member of the group and the employees' union.
• B)The cessation of the selling or purchasing member's affiliation with the group.
• C)The worthlessness or satisfaction of an obligation (other than an obligation of the group) transferred in an intercompany transaction.
• D)The disposition of property outside the group (other than an installment sale) where the property was acquired in an intercompany transaction.
• E)The filing of a separate return by either the purchasing or selling member or the entire group.

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Definitions:

Favorable Variance

Occurs when actual performance is better than expected, leading to lower costs or higher revenues than planned.

Budgeted Revenue

The projected income that a business or organization expects to generate within a specific period, often used for planning and performance evaluation.

Standard Costs

Predetermined costs assigned to goods and services, used as a benchmark for evaluating actual production costs.

Budgeted Performance

The planned or forecasted financial performance of a business or project, often including revenue, expenses, and profit targets.