When a Subsidiary Declares a Final Dividend Payable to a Parent

question 30

Multiple Choice

When a subsidiary declares a final dividend payable to a parent who has a 100% interest in the subsidiary, the parent recognises a dividend receivable and the subsidiary recognises a dividend payable. In addition to the elimination of these two items on consolidation, the following items must also be eliminated:

• A) Dividend revenue and Cash.
• B) Dividend declared and Cash.
• C) Dividend declared and Dividend revenue.
• D) Dividend declared and Retained earnings.

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Definitions:

Clique

A small, exclusive group of individuals with shared interests or common goals, often perceived as isolating themselves from others.

Person-To-Person

Direct interaction or communication between two or more individuals.

Person-To-Person

Direct communication or interaction between individuals, often implying a more intimate or personal connection.

Closed Group

A group with fixed membership, where new members can join only when it opens up for new intake.