Which of the Following Situations,involving Eliminations as Part of the Consolidation

question 3

Multiple Choice

Which of the following situations,involving eliminations as part of the consolidation process,would not have implications for the calculation of non-controlling interest?

• A) the sale of a non-current asset by the subsidiary to the parent
• B) the payment of a management fee by the subsidiary to the parent
• C) the sale of inventory by the parent to the subsidiary
• D) the payment of a management fee by the subsidiary to the parent and the sale of inventory by the parent to the subsidiary

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Definitions:

Risk Of Loss

The potential for an investment or transaction to result in a financial loss.

Negotiable Instrument

A financial document that guarantees the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.

Contract Silent

A scenario where a contract does not specify terms or conditions regarding a particular aspect or issue.

Voidable Title

A legal term indicating that a transfer of ownership may be declared invalid by a court, typically because of fraud or misrepresentation at the time of transaction.