Unrealised profit in the opening inventory 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 inventory.
D)debit to inventory.

Question

Quizplus · Accepted Answer

Unrealised profit in the opening inventory is adjusted by debiting retained earnings to reduce the profit that was overstated in the previous period.

Unrealised Profit in the Opening Inventory of a Financial Period