The Tax Effect of Eliminating the Unrealised Profit from an Intragroup

question 19

Multiple Choice

The tax effect of eliminating the unrealised profit from an intragroup sale of inventories and adjusting the value of the inventories on hand is recognised as:

• A) an increase in deferred tax liability.
• B) a decrease in deferred tax liability.
• C) an increase in deferred tax asset.
• D) an increase in income tax expense.

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Definitions:

Obsession

Obsession is an intense or excessive preoccupation with a particular idea, object, or activity.

Effective Discipline

An approach to managing behavior that is focused on teaching and guiding rather than punishment, aiming to promote self-control and appropriate conduct.

Clear Guidelines

Explicitly stated and easily understandable rules or instructions designed to direct behavior or processes.

Corrective Action

Steps taken to eliminate causes of existing nonconformities or undesirable situations to prevent recurrence.