For Each of the Following Intercompany Transactions, State the Principle

question 37

Essay

For each of the following intercompany transactions, state the principle to be used in accounting for intercompany gains on current and future consolidated income statements:
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a.Gains on merchandise sales
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b.Gains on the sale of land
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c.Gains on the sale of depreciable fixed assets
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d.Interest on intercompany notes
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Definitions:

For Deposit

A notation indicating that funds are to be deposited into a bank account rather than cashed or used for another purpose.

Legal Remedies

Measures granted by the court to enforce a right, compensate for an injury, or rectify a wrong. This includes damages, injunctions, and specific performance.

Electronic Note

A digital form of a promissory note or loan agreement, legally binding and used in financial transactions.

Negotiable Instrument

A documented promise to pay a certain sum of money, either when asked for or at a predetermined date.