An Upstream Sale of Inventory Is a Sale

question 46

Multiple Choice

An upstream sale of inventory is a sale:

• A) Between subsidiaries owned by a common parent.
• B) With the transfer of goods scheduled by contract to occur on a specified future date.
• C) In which the goods are physically transported by boat from a subsidiary to its parent.
• D) Made by the investor to the investee.
• E) Made by the investee to the investor.

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Definitions:

Financial Data

Information related to money matters of a company, including its revenue, expenses, profits, and losses.

Sales On Account

Transactions where goods or services are sold with payment to be received at a later date, typically recorded as accounts receivable on the balance sheet.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, indicating the efficiency in managing, selling, and restocking goods.