How Do Intercompany Sales of Inventory Affect the Preparation of a Consolidated

question 109

Multiple Choice

How do intercompany sales of inventory affect the preparation of a consolidated statement of cash flows?

• A)They must be added in calculating cash flows from investing activities.
• B)They must be deducted in calculating cash flows from investing activities.
• C)They must be added in calculating cash flows from operating activities.
• D)Because the consolidated balance sheet and income statement are used in preparing the consolidated statement of cash flows,no special elimination is required.
• E)They must be deducted in calculating cash flows from operating activities.

---

Definitions:

Customer Service

The assistance and advice provided by a company to those people who buy or use its products or services.

Retention Marketing

Retention marketing focuses on strategies and actions aimed at retaining existing customers, enhancing their loyalty, and increasing their lifetime value to the business.

Temporal Factor

A variable related to time that influences outcomes, events, or processes, including duration, timing, and sequence.

Consumer Purchases

The action of acquiring goods or services for personal use or ownership by an individual.