In the consolidation worksheet for 2017, which of the following accounts would be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers?
A) Retained earnings.
B) Cost of goods sold.
C) Inventory.
D) Investment in Fisher Company.
E) Sales.

Question

Quizplus · Accepted Answer

The correct account that needs to be credited to eliminate unrecognized intra-entity gross profit with regard to the 2017 intra-entity transfers is the inventory account because it is the account that is affected by the intra-entity transfers, and crediting it will eliminate the gross profit arising from these transfers. The other accounts listed are not directly impacted by the intra-entity transfers and do not relate to the elimination of intra-entity gross profit.

In the Consolidation Worksheet for 2017, Which of the Following