In the Preparation of a Consolidated Statements Workpaper, Dividend Income

question 31

Multiple Choice

In the preparation of a consolidated statements workpaper, dividend income recognized by a parent company for dividends distributed by its subsidiary is:

• A) included with parent company income from other sources to constitute consolidated net income.
• B) assigned as a component of the noncontrolling interest.
• C) allocated proportionately to consolidated net income and the noncontrolling interest.
• D) eliminated.

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Definitions:

Civil Liability

The responsibility to compensate for losses or damages caused to another party due to negligence or unlawful acts within civil law.

Confidential Information

Information that is not public knowledge and is protected from unauthorized disclosure, typically due to its sensitive nature.

Complying

The act of following, obeying, or conforming to a set rule, standard, or demand.

Court Order

A directive issued by a court or a judge requiring a person or entity to do or refrain from doing something.