Regarding Interfund Transactions,which of the Following Is Not Correct

question 108

Multiple Choice

Regarding interfund transactions,which of the following is not correct?

• A) Transaction between funds are not assumed to be arm's length in nature
• B) Failure to properly report interfund transactions will result in two funds being misstated.
• C) Interfund transactions must be repaid.
• D) Interfund reimbursement is a payment by one fund to second fund to repay it for a purchase which belongs in the first fund.

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Definitions:

Book Value

The net value of an asset or liability recorded in the financial statements, often equal to its cost minus accumulated depreciation or amortization.

IFRS 3

IFRS 3 is an International Financial Reporting Standard that provides guidance on accounting for business combinations, requiring entities to measure the acquiree's assets and liabilities at their fair values at the acquisition date.

Liabilities

Financial obligations a company owes to external parties, including loans, accounts payable, and other debts.

Business Combinations

Mergers and acquisitions where one company acquires control over another, combining entities into one.