A Consolidation Adjustment Entry Made to Eliminate the Intragroup Sales

question 15

Multiple Choice

A consolidation adjustment entry made to eliminate the intragroup sales of inventory at a profit would take the following form:

• A) DR Cost of Sales, CR Sales, CR Inventory
• B) DR Sales, CR Cost of Sales, CR Inventory
• C) DR Cash, DR Cost of Sales, CR Inventory
• D) DR Inventory, CR Sales, CR Cash.

---

Definitions:

Consumer Surplus

The contrast between the total price consumers are willing to pay for a good or service and the actual amount paid.

Equilibrium Point

In economics, it refers to the state where market supply equals demand, resulting in a stable price and quantity.

S And D Curves

Supply and Demand curves; graphical representations of the relationship between the quantities of goods and services that producers are willing to sell and consumers are willing to buy at various prices.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, due to higher market prices.