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:

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and equity of a parent company and its subsidiaries into one document.

Acquisition Consideration

The total value transferred by a company to acquire another company, which may include cash, assets, or stock.

Functional Currency

The primary currency of the primary economic environment in which an entity operates, and in which it typically generates and expends cash.

Exchange Rates

The rate at which one currency is exchanged for another.