Dividends Paid Between Entities in the Group Should Be

question 19

Multiple Choice

Dividends paid between entities in the group should be:

• A) Not permitted by the ultimate controlling entity because it does not make sense to exchange money between entities in the one economic group.
• B) Reflected in the group accounts because it reflects the economic return the group earned by investing in the companies that form its operations.
• C) Eliminated from the group accounts, but reflected in the individual legal entity accounts, since the group accounts reflect the many entities as one single economic entity.
• D) Retained in the consolidated statements but disclosed separately as related-party transactions.
• E) None of the given answers.

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Definitions:

Immediate Memory

The capacity to hold a small amount of information in mind in an active, readily available state for a short period.

Adduction

The movement of a body part toward the central axis of the body.

Abduction

The movement of a limb or body part away from the midline of the body or away from another body part.

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A condition characterized by outward curving of the legs, typically observed in toddlers as a part of normal growth or as a result of disease such as rickets.