Which Statement Is True Concerning Unrecognized Profits in Intra-Entity Inventory

question 49

Multiple Choice

Which statement is true concerning unrecognized profits in intra-entity inventory sales when an investor uses the equity method?

• A) The investor and investee make reciprocal entries to defer and recognize inventory profits.
• B) The same adjustments are made for upstream and downstream sales.
• C) Different adjustments are made for upstream and downstream sales.
• D) No adjustments are necessary.
• E) Adjustments will be made only when profits are known upon sale to outsiders.

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Definitions:

Rogers

Refers to Carl Rogers, an influential American psychologist who founded the humanistic approach to psychology.

Love

A complex set of emotions, behaviors, and beliefs associated with strong feelings of affection, warmth, and respect for another person.

Humanistic

A psychological perspective focusing on individual potential and stress on the importance of growth and self-actualization.

Psychology

The scientific study of the mind and behavior, encompassing various aspects of human experience and including different fields such as cognitive, emotional, and social processes.