Which of the Following Events Is an Intercompany Transaction

question 29

Multiple Choice

Which of the following events is an intercompany transaction?

• A)a capital contribution
• B)accrual of interest on a loan made by one group member to another group member; both group members use the accrual method of accounting
• C)dividend payment received from a subsidiary corporation to its parent corporation; the subsidiary corporation is not an includible corporation
• D)a parent corporation's sale of stock of a subsidiary corporation to a nonmember of the group

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Definitions:

Elasticity

A measure of how much the quantity demanded or supplied of a good or service changes in response to changes in price, income, or other factors.

Income Elasticity

A measure of how much the demand for a good changes in response to a change in consumers' income.

Quantity Demanded

The overall volume of a specific good or service that consumers intend and have the means to acquire at a given price.