Sky Limited, a Subsidiary Entity, Sold a Non-Current Asset at a Profit

question 29

Multiple Choice

Sky Limited, a subsidiary entity, sold a non-current asset at a profit to its parent entity, Dive Limited. The adjustment necessary on consolidation to reflect the tax effect of this transaction will result in a(n) :

• A) increase in deferred tax assets.
• B) increase in deferred tax liabilities.
• C) increase in income tax expense.
• D) decrease in deferred tax assets.

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Definitions:

Kinship Chart

A visual representation outlining relationships within a family or clan, often used in anthropology.

Arranged Marriages

Marriages that are organized by family members or matchmakers, not based primarily on the romantic desires of the individuals getting married.

Mundurucu

An Indigenous group from the Amazonian region of Brazil, known for their unique cultural practices and language.

Father's Brother's Daughter

A kinship term used in certain cultures to describe a specific familial relationship, indicating one's cousin from the father's side of the family.