Intercompany Transactions

Question 1

Eliminate _____ of intercompany transactions

Answer 1

100%

Question 2

______ eliminate intercompany accounts if you do not consolidate

Answer 2

do not

Question 3

If inventory is sold to outsiders after an intercompany sale, reverse the original intercompany transaction and correct _________

Answer 3

COGS

Question 4

If inventory is still on hand after an intercompany sale, reverse the original intercompany transaction and correct _____ ______

Answer 4

ending inventory

Question 5

If one member of the consolidated group acquires an affiliate’s debt from an outsider, the debt is considered to be retired and a _________ is recognized on the consolidated income statement

Answer 5

gain/loss