Which of the Following Statements Is True Regarding an Intra-Entity

question 26

Multiple Choice

Which of the following statements is true regarding an intra-entity transfer of land?

• A) A loss is always recognized but a gain is deferred in a consolidated income statement.
• B) A loss and a gain are deferred until the land is sold to an outside party.
• C) A loss and a gain are always recognized in a consolidated income statement.
• D) A gain is always recognized but a loss is deferred in a consolidated income statement.
• E) Recognition of a gain or loss is deferred by adjusting stockholders' equity through comprehensive income.

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Definitions:

Weighted Average Cost of Capital

A financial metric that calculates a firm's cost of capital, weighted by the proportion of equity and debt financing.

Residual Income

The amount of income that an individual or company retains after accounting for all costs and expenses.