Which of the Following Is Not True with Respect to Intercompany

question 66

Multiple Choice

Which of the following is not true with respect to intercompany transfers that occurred during the year?

• A)Comprehensive income will decrease for the amount of the unrealized profit.
• B)Comprehensive income will increase for the tax on the unrealized profit.
• C)The statement of financial position will include a decrease to the asset for the amount of the unrealized profit that still remains.
• D)The deferred tax asset will decrease for the amount of unrealized profit that still remains.

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Definitions:

Assets

Resources owned by a company that have future economic value that can be measured and can be used to generate income.

Equity

The value of an owner’s interest in a property or a company, after all debts and liabilities have been deducted.

Income Statement

An income statement is a financial statement that shows a company's financial performance over a specific accounting period, highlighting revenue, expenses, and profit or loss.

Revenues

The total amount of money received by the company for goods sold or services provided during a specific time period.