Andronico Limited Provided an Advance of $500 000 to Its

question 17

Multiple Choice

Andronico Limited provided an advance of $500 000 to its subsidiary Galactico Limited.On consolidation the following adjustment is needed in relation to this intragroup advance:

• A)no adjustment needed
• B)DR Advances to subsidiaries $500 000 CR Advances from parent $500 000
• C)DR Advances from parent $500 000 CR Advances to subsidiaries $500 000
• D)DR Advances from parent $500 000 CR Cash $500 000

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Definitions:

Periodic Method

An inventory accounting method where updates to the inventory records are made periodically, typically at the end of the accounting period.

Merchandise Inventory

Goods available for sale, reported as a current asset on a company's balance sheet.

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.

Balance Sheet

A financial statement that displays a company's assets, liabilities, and shareholders' equity at a specific point in time.