Only the intercompany transactions resulting in revenues require elimination entries in the preparation of a consolidated income statement.

Question

Quizplus · Accepted Answer

All intercompany transactions, including those resulting in revenues, require elimination entries in the preparation of a consolidated income statement. Eliminating these transactions ensures that the income statement reflects only transactions with external parties and accurately reflects the consolidated financial performance of the company.

Only the Intercompany Transactions Resulting in Revenues Require Elimination Entries