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

question 28

Multiple Choice

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

• A) The investee must defer upstream ending inventory profits.
• B) The investee must defer upstream beginning inventory profits.
• C) The investor must defer downstream ending inventory profits.
• D) The investor must defer downstream beginning inventory profits.
• E) The investor must defer upstream beginning inventory profits.

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