The effect of an intragroup sale of inventory in a prior period,where the inventory is still on hand at the end of the current period,is that a credit adjustment is made to inventory in the current period.

Question

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When an intragroup sale of inventory occurs in a prior period and the inventory is still on hand at the end of the current period, a credit adjustment is made to inventory in the current period to reflect the transfer within the group. This ensures that the financial statements accurately reflect the true value of the inventory on hand.

The Effect of an Intragroup Sale of Inventory in a Prior