When Assets Sold Within the Group Are Sold Later, but Within

question 19

True/False

When assets sold within the group are sold later, but within the same reporting period, to an external party, consolidated profit is then invariably the difference between the ultimate selling price and the original cost of the goods.

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Definitions:

Weighted-Average Method

A technique used in various contexts, such as inventory valuation and cost accounting, that calculates an average taking into account the proportionate importance of each component.

Equivalent Units

A concept in cost accounting used to allocate production costs between completed and partially completed goods.

FIFO Method

First-In, First-Out method, an inventory valuation technique where goods first added to inventory are assumed to be the first ones sold.

Cost Per Equivalent Unit

A calculation used in process costing to allocate costs equally among produced units.