_____ In 2005, an intercompany inventory transfer above cost occurred. In 2006, all this inventory was resold to an outside party. Which of the following accounts would require adjustment or elimination in consolidation at 12/31/06?

Question

Quizplus · Accepted Answer

In 2006, when the inventory is resold to an outside party, the intercompany profit from 2005 needs to be eliminated from the consolidated Cost of Sales to avoid overstating profits.

_____ in 2005, an Intercompany Inventory Transfer Above Cost Occurred