The Tax Effect of Eliminating the Unrealised Profit from an Intragroup

Multiple Choice

The tax effect of eliminating the unrealised profit from an intragroup sale of inventories and adjusting the value of the inventories on hand is recognised as:

A) an increase in deferred tax liability.
B) a decrease in deferred tax liability.
C) an increase in deferred tax asset.
D) an increase in income tax expense.