Unrealised Profits on Intra-Group Sale of Inventories Arise If

question 19

Multiple Choice

Unrealised profits on intra-group sale of inventories arise if:

• A) the sale is an upstream transaction
• B) the sale is a downstream transaction
• C) the inventories are held within the group at date of consolidation
• D) none of the above

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Definitions:

Additional Costs

Expenses incurred that are above the initially planned or estimated amounts.

Plant Assets

Long-term physical assets used in the operating activities of a business, such as machinery, buildings, and equipment.

Current Period

Refers to the specific time frame, such as a month, quarter, or year, currently under consideration or analysis.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair market value of its net identifiable assets.