Which of the following statements is true regarding an intra-entity transfer of land?
A) A loss is always recognized but a gain is deferred in a consolidated income statement.
B) A loss and a gain are deferred until the land is sold to an outside party.
C) A loss and a gain are always recognized in a consolidated income statement.
D) A gain is always recognized but a loss is deferred in a consolidated income statement.
E) Recognition of a gain or loss is deferred by adjusting stockholders' equity through comprehensive income.

Question

Quizplus · Accepted Answer

In an intra-entity transfer of land, both gains and losses are deferred until the land is sold to an outside party to avoid recognizing unrealized profits or losses in the consolidated financial statements.

Which of the Following Statements Is True Regarding an Intra-Entity