Questions from Advanced Accounting


Q: The adjustment for the holdback of an intercompany gain in assets requires

The adjustment for the holdback of an intercompany gain in assets requires a corresponding adjustment to a consolidated deferred tax asset. The adjustment for a gain from intercompany bond holdings re...

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Q: "Some intercompany gains (losses) are realized for consolidation purposes

"Some intercompany gains (losses) are realized for consolidation purposes subsequent to their actual recording by the affiliates, while others are recorded by the affiliates subsequent to their realiz...

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Q: Name the two methods of accounting for contributions, and explain how

Name the two methods of accounting for contributions, and explain how the methods differ from each other.

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Q: Explain how the recognition of gains on the elimination of intercompany bond

Explain how the recognition of gains on the elimination of intercompany bond holdings is consistent with the principle of recording gains only when they are realized.

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Q: Explain how the matching principle supports the recognition of deferred income tax

Explain how the matching principle supports the recognition of deferred income tax expense when a gain is recognized on the elimination of intercompany bond holdings.

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Q: "The realization of intercompany inventory and depreciable asset profits is really

"The realization of intercompany inventory and depreciable asset profits is really an adjustment made in the preparation of consolidated income statements to arrive at historical cost numbers." Explai...

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Q: An intercompany inventory profit is realized when the inventory is sold outside

An intercompany inventory profit is realized when the inventory is sold outside the entity. Is this also the case with respect to an intercompany profit in a depreciable asset? Explain.

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Q: An intercompany gain on a depreciable asset resulting from a sale by

An intercompany gain on a depreciable asset resulting from a sale by the parent company is subsequently realized by an adjustment to the subsidiary's depreciation expense in the preparation of consoli...

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Q: Why does an intercompany sale of a depreciable asset (such as

Why does an intercompany sale of a depreciable asset (such as equipment or a building) require subsequent adjustments to depreciation expense within the consolidation process?

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Q: If an intercompany sale of a depreciable asset has been made at

If an intercompany sale of a depreciable asset has been made at a price above carrying amount, the beginning retained earnings of the seller are reduced when preparing each subsequent consolidation. W...

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