Unrealised profit in the opening inventories of a financial period is adjusted in the consolidation worksheet by a:
A) debit to retained earnings.
B) credit to retained earnings.
C) credit to inventories.
D) debit to inventories.

Question

Quizplus · Accepted Answer

Unrealised profit in opening inventories is adjusted by debiting retained earnings to eliminate the profit that was recognized in the previous period.

Unrealised Profit in the Opening Inventories of a Financial Period