Which of the Following Statements Is Not Correct

question 15

Multiple Choice

Which of the following statements is not correct?

• A) The consolidated income statement is the result of combining mechanically the parent and subsidiary income statements with the elimination of any intra-group transactions.
• B) The elimination of intra-group transactions is mathematically automatic since the sales revenue recognized in one of the income statement is part of the costs incurred in the other's income statement.
• C) The intra-group transactions affect the income of the consolidated entity.
• D) It is critical to explicitly cancel out all intra-group transactions to avoid the risk of biasing operating ratios involving sales revenue and cost of sales separately (by artificially inflating the balances).

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Definitions:

Vulnerable Narcissist

A type of narcissism characterized by sensitivity to criticism and a fragile self-esteem hidden beneath a superficial self-confidence.

Narcissist Subtype

Variants within narcissism that display specific patterns of behavior or attributes, such as overt, covert, or malignant narcissism.

Histrionic Personality Disorder

Sharing features with borderline personality disorder, including rapidly shifting emotions and intense, unstable relationships, people with this disorder also behave in ways to draw attention to themselves across situations.

Psychodynamic Psychotherapists

Mental health professionals who treat psychological disorders by exploring the unconscious mind, past experiences, and interpersonal relationships.