Material sale of inventory items by a parent company

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Reference no: EM13132006

The material 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 perpetual inventory system.

C) Does not result in consolidated income until the merchandise is sold to outside parties.

D) Does not require a working paper adjustment if the merchandise was transferred at cost.

Reference no: EM13132006

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