When a Parent and Its Subsidiary Use a Periodic Inventory

question 40

Multiple Choice

When a parent and its subsidiary use a periodic inventory system rather than a perpetual system,the income and asset balances reported in the consolidated financial statements are:
I.affected only if there are upstream intercompany sales of inventory.
II.affected only if there are downstream intercompany sales of inventory.

• A)I
• B)II
• C)Both I and II
• D)Neither I nor II

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Definitions:

Indigenous Groups

Communities native to a particular region or country, often with distinct cultures, languages, and traditions that predate colonial influences.

Southern United States

A region in the United States characterized by its distinct historical, cultural, and environmental attributes, traditionally including states south of the Mason-Dixon Line.

Centralized Government

A government structure where a central authority controls the power and decision-making processes, often at the expense of local governance.

Early Cities

Urban centers that emerged in ancient times as a result of population growth, trade, and the development of agriculture and governance.