Which of the Following Statements Is True with Regard to Intercompany

question 48

Multiple Choice

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

• A)The gain or loss on an intercompany transaction never is taxed.
• B)An intercompany transaction is eliminated from consolidated taxable income.
• C)All intercompany gains are recognized,but losses must be deferred.
• D)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.
• E)The gain or loss on an intercompany transaction is deferred for up to ten years,after which it is recognized.

---

Definitions:

Intellectual Disability

A disability characterized by significant limitations in both intellectual functioning (reasoning, learning, problem solving) and in adaptive behavior, which covers a range of everyday social and practical skills.

Subaverage Intellectual Functioning

Below average intellectual capability as demonstrated by an IQ typically under 70, and associated with difficulties in adaptive functioning.

Dominant Inheritance

A pattern of inheritance in genetics where an allele is expressed in the phenotype, even in the presence of a different allele.

Intellectual Disability

A state defined by notable restrictions in intellectual capabilities as well as in adaptive behavior, encompassing a broad range of daily social and practical abilities.