Question

When there are intercompany sales of inventory during the year and a three-part consolidation worksheet is prepared, consolidation entries related to the intercompany sales:I. Always are needed.II. Are not needed if the entire inventory is resold to unrelated parties prior to the end of the year.

Answer 1

Answer: When there are intercompany sales of inventory during the year and a three-part consolidation worksheet is prepared, consolidation entries related to the intercompany sales "I. Always are needed."

To correctly reflect the economic reality of the economic group under consideration.