When Preparing Consolidated Financial Statement Workpapers, Unrealized Intercompany Gains, as a Result

question 31

Multiple Choice

When preparing consolidated financial statement workpapers, unrealized intercompany gains, as a result of equipment or inventory sales by affiliates, are allocated proportionately by percent of ownership between parent and subsidiary only when the selling affiliate is:

• A) the parent and the subsidiary is less than wholly owned.
• B) a wholly owned subsidiary.
• C) the subsidiary and the subsidiary is less than wholly owned.
• D) the parent of a wholly owned subsidiary.

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Definitions:

Categorical Propositions

Statements in logic that assert or deny something about all or some of the members of a category, involving a subject and predicate and following specific forms.

Middle Term

The term that appears in both premises of a categorical syllogism but not in the conclusion, connecting the other two terms.

Syllogism

A method of deducing an outcome from two provided or presumed statements.

Premises

Claims or premises that serve as the foundation for an argument or from which inferences are made.