The Material Sale of Inventory Items by a Parent Company

question 20

Multiple Choice

The material sale of inventory items by a parent company to an affiliated company

• A)enters the consolidated revenue computation only if the transfer was the result of arm's length bargaining.
• B)affects consolidated net income under a periodic inventory system but not under a perpetual inventory system.
• C)does not result in consolidated income until the merchandise is sold to outside parties.
• D)does not require a working paper adjustment if the merchandise was transferred at cost.

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Definitions:

Subconscious Mind

The segment of the mind that isn't presently at the forefront of consciousness yet affects thoughts, emotions, and behaviors.

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A building or space for storing goods, products, or materials.

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Techniques or practices aimed at managing and mitigating feelings of anger.

Generalities

Broad, unspecific statements or ideas that lack detailed information or differentiation.