Which of the Following Statements About Property Dividends Is FALSE

question 67

Multiple Choice

Which of the following statements about property dividends is FALSE?

• A) A property dividend is a nonreciprocal transfer of nonmonetary assets.
• B) A property dividend is also called a dividend in kind.
• C) The accounting for a property dividend should be based on the carrying value (book value) of the nonmonetary assets transferred.
• D) The accounting for a property dividend should be based on the fair value of the nonmonetary assets transferred.

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Definitions:

Operating Segments

Components of a business from which separate financial information is available and are regularly reviewed by the enterprise’s decision-makers for performance assessment and resource allocation.

Consolidated Net Income

The total profit of a corporation and its subsidiaries after taxes, interest, depreciation, and other expenses have been deducted, reflecting the overall earnings of the conglomerate.

Parent

A company that controls or owns more than half of another company's stock, thereby having control over its subsidiary.

Subsidiary

A company controlled by another company, referred to as the parent company, through ownership of more than half of its voting stock.