When Calculating the Direct Non-Controlling Interest Share of Equity,consolidation Adjustments

question 7

Multiple Choice

When calculating the direct non-controlling interest share of equity,consolidation adjustments are needed to:

• A)eliminate any realised profits or losses from inventory transfers.
• B)recognise any unrealised profits or losses from intragroup service transfers.
• C)fully eliminate any unrealised profits or losses from intragroup transactions.
• D)partially eliminate any unrealised profits from inventory transfers.

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Definitions:

Profit

The financial benefit realized when revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the operation.

Total Output

The total amount of goods and services produced within an economy at a given overall price level in a given time period.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of the operation and output increases.

Coordination Problems

Challenges that arise in aligning the plans and actions of multiple parties in order to achieve a common goal or optimize outcomes.