Question

"Which statement is FALSE concerning the elimination entries required for intercompany sales of land from a subsidiary to its parent?

a) Eliminating entries for intercompany sales of land aim to reflect the transaction as if it occurred with an external party.
b) Eliminating entries may involve adjusting the consolidated assets to remove the intercompany sale impact.
c) Eliminating entries for intercompany sales of land affect the consolidated financial statements.
d) Eliminating entries for intercompany sales of land do not impact the equity section of the consolidated financial statements."

Answer 1

The statement that is FALSE is option d) Eliminating entries for intercompany sales of land do not impact the equity section of the consolidated financial statements.

Step-by-step explanation:

The statement that is FALSE concerning the elimination entries required for intercompany sales of land from a subsidiary to its parent is option d) Eliminating entries for intercompany sales of land do not impact the equity section of the consolidated financial statements.

Eliminating entries for intercompany sales of land aim to reflect the transaction as if it occurred with an external party, and they may involve adjusting the consolidated assets to remove the intercompany sale impact. These eliminating entries do affect the consolidated financial statements, including the equity section, as it is necessary to properly represent the transactions between the subsidiary and the parent company.