In Preparing Consolidation Working Papers, Why Is It Necessary to Eliminate

question 2

Multiple Choice

In preparing consolidation working papers, why is it necessary to eliminate intercompany profits?

• A)To nullify the effect of intercompany transactions on consolidated financial statements
• B)To defer intercompany profits until the following year
• C)To allocate unrealized profits until the following year
• D)To differentiate between realized and unrealized profits

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Definitions:

Operant Responding

A method of learning that occurs through rewards and punishments for behavior, influencing the likelihood of that behavior being repeated.

Negative Reinforcers

Stimuli that, when removed following a behavior, increase the likelihood of that behavior being repeated in the future.

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment.

Observational Learning

The process of acquiring new behaviors or knowledge by observing the actions of others and the consequences of those actions.