Which of the Following Statements Is True with Regard to Intercompany

question 98

Multiple Choice

Which of the following statements is true with regard to intercompany transactions?

• A)An intercompany transaction is eliminated from consolidated taxable income.
• B)All intercompany gains are recognized, but losses must be deferred.
• C)A cash sale of a business asset by the purchasing member to an acquirer outside of the group triggers immediate recognition of the gain or loss.
• D)The gain or loss on an intercompany transaction is deferred for up to ten years, after which it is recognized.

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Definitions:

Bacteriostatic

Bacteriostatic describes a substance that inhibits the growth and reproduction of bacteria without necessarily killing them.

Bactericidal

Capable of killing some microorganisms (bacteria).

Disinfectant

An agent that destroys all microorganisms.

Hepatitis A

A highly contagious liver infection caused by the hepatitis A virus, typically transmitted through ingestion of contaminated food or water.