A Consolidation Worksheet Adjustment to Eliminate the Effect of Interest

question 20

Multiple Choice

A consolidation worksheet adjustment to eliminate the effect of interest revenue and interest expense relating to intragroup loans has which of the following tax effects?

• A) No tax effect
• B) Increase in current tax liability
• C) Increase in deferred tax liability
• D) Decrease in deferred tax asset

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Definitions:

Restrictive Indorsement

A limitation specified on the face of a check or document that restricts the further transfer of its title or requires certain conditions to be met.

Trust

A fiduciary relationship in which one party, known as a trustee, holds title to property for the benefit of another party, known as a beneficiary.

Pay to

Directs the transfer of money or assets to a specified person, entity, or account as outlined in a financial or legal document.

Real Defenses

Legal defenses that can be used to challenge the enforceability of a negotiable instrument, such as fraud, duress, or alteration.