When eliminating any unrealised profit arising when a joint operator provides services to a joint operation the profit is eliminated against:
A) the investment in the joint operation;
B) retained earnings;
C) work in progress, finished goods and other inventory related accounts;
D) cost of good sold.

Question

Quizplus · Accepted Answer

The unrealised profit is eliminated against inventory-related accounts because it affects the valuation of inventory on the balance sheet.

When Eliminating Any Unrealised Profit Arising When a Joint Operator