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

question 109

Multiple Choice

Which of the following statements is true concerning an intra-entity transfer of a depreciable asset?

• A) Net income attributable to the noncontrolling interest is never affected by a gain on the transfer.
• B) Net income attributable to the noncontrolling interest is always affected by a gain on the transfer.
• C) Net income attributable to the noncontrolling interest is affected by a downstream gain only.
• D) Net income attributable to the noncontrolling interest is affected only when the transfer is upstream.
• E) Net income attributable to the noncontrolling interest is increased by an upstream gain in the year of transfer.

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Definitions:

Painting Department

A specific section within a manufacturing or production facility responsible for the application of paint or coatings to products as part of the finishing process.

Single Plantwide Overhead Rate

A method for allocating all manufacturing overhead expenses to products based on a single cost driver.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process or providing a service.

Single Plantwide Factory Overhead Rate

A method of allocating factory overhead to products based on a single, consistent rate applicable throughout the entire manufacturing plant.