_____ Regarding the Preparation of a Consolidated Tax Return, Which

Multiple Choice

_____ Regarding the preparation of a consolidated tax return, which of the following statements is false?

A) Intercompany profits on intercompany inventory transfers are deferred until the inventory is sold outside the consolidated group.
B) Intercompany losses on intercompany inventory transfers are deferred until the inventory is sold outside the consolidated group.
C) Intercompany dividends are not taxed.
D) Intercompany dividends are reported as taxable income on the cash basis.
E) For those companies within the consolidated group that do not generate profits, their losses can be offset against the earnings of other members of the consolidated group.