The sale of inventory items by a parent company to an affiliated companya.enters the consolidated revenue computation only if the transfer was the result of arm's length bargaining.b.affects consolidated net income under a periodic inventory system but not under a perpetual inventory system.c.does not result in consolidated income until the merchandise is sold to outside entities.d.does not require a working paper adjustment if the merchandise was transferred at cost.

The parents company normally sends goods to affiliated company and but both sales and profit are…

Answered: e sale of inventory items by a parent…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The sale of inventory items by a parent company to an affiliated company

a.	enters the consolidated revenue computation only if the transfer was the result of arm's length bargaining.
b.	affects consolidated net income under a periodic inventory system but not under a perpetual inventory system.
c.	does not result in consolidated income until the merchandise is sold to outside entities.
d.	does not require a working paper adjustment if the merchandise was transferred at cost.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting Policies, Changes in Accounting Estimates and Errors

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions