Final answer:
Intercompany receivables do not require an income statement adjustment when consolidating financial statements, as these are eliminated to present the group's financial position and performance as a single entity.
Step-by-step explanation:
The student asked: Do intercompany receivables require an income statement adjustment when consolidating financial statements? The answer is b. No. When preparing consolidated financial statements, intercompany receivables and payables are eliminated, because they represent internal transactions that do not affect the consolidated company's net assets or net income. Therefore, no income statement adjustment is necessary for intercompany receivables as they are offset by intercompany payables in consolidation. The key is to ensure that the financial statements present a clear view of the financial position and performance of the group as a single entity.