Which of the Following Statements Is Incorrect with Respect to Parent-Subsidiary

question 79

Multiple Choice

Which of the following statements is incorrect with respect to parent-subsidiary corporations?

• A)If a consolidated tax return is filed,losses on intercompany sales cannot be immediately recognized.
• B)A parent-subsidiary group must file a consolidated tax return.
• C)A parent-subsidiary group is one where a common parent corporation owns,directly or indirectly,at least 80% of one or more other corporations.
• D)With a consolidated return,net losses of one company can offset net income from another company.

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Definitions:

Resale

Resale refers to the process of selling previously owned, used, or surplus merchandise or goods.

Asset

An asset is anything of value or a resource of value that can be owned or controlled to produce positive economic value for an individual or organization.

Permeability

The capability of a porous material to allow fluids to pass through it, crucial in determining the flow of water and hydrocarbons in geology.

Porosity

A measure of how much of a rock, soil, or sediment's volume is occupied by voids or pores, affecting its ability to hold fluids.