Parent and Subsidiary Corporations Have Filed Calendar-Year Consolidated Tax Returns

question 16

Multiple Choice

Parent and Subsidiary Corporations have filed calendar-year consolidated tax returns for several years. Parent Corporation uses the cash method of accounting while Subsidiary Corporation uses the accrual method of accounting. If Parent lends Subsidiary money

• A)the interest expense is deductible when accrued.
• B)the interest expense and interest income may be reported in different consolidated return years.
• C)the interest income is reported when the interest expense is accrued by Subsidiary.
• D)the interest expense deduction is taken when Parent reports the interest income.

---

Definitions:

Victory of Islam

Refers to the historical and religious expansion of Islam, marked by conquests and the spread of Muslim culture and religion starting in the 7th century.

Gopuras

The massive, ornamented entrance gateway towers of southern Indian temple compounds.

Gateway Towers

Structures flanking a gate or entrance, often part of a fortification or religious complex, marking the transition from one space to another.

Temple Complexes

Groups of buildings or structures dedicated to worship, typically consisting of one or more temples and other associated religious, administrative, or living spaces.