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In Preparing Consolidation Working Papers, Why Is It Necessary to Eliminate

Question 1

Multiple Choice

In preparing consolidation working papers, why is it necessary to eliminate intercompany profits?


A) To nullify the effect of intercompany transactions on consolidated financial statements
B) To defer intercompany profits until the following year
C) To allocate unrealized profits until the following year
D) To differentiate between realized and unrealized profits

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