Which of the Following Statements Is Incorrect with Regards to Non-Controlling

question 24

Multiple Choice

Which of the following statements is incorrect with regards to non-controlling interests in subsidiaries?

• A) The requirement to eliminate the effects of intragroup transactions does not hold when there are non-controlling interests.
• B) The non-controlling interest's share in the dividends paid or proposed by the subsidiary is not eliminated on consolidation.
• C) The non-controlling interest's share of the profits of the subsidiary is calculated after adjustments to eliminate income and expenses of the subsidiary that are realised from the economic entity's perspective.
• D) Management fees paid in an intragroup transaction are considered realised when determining non-controlling interests in a subsidiary.

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Definitions:

Indifference Curve

An indifference curve is a graph that shows a combination of two goods that give a consumer equal satisfaction and utility.

Normal Good

A good for which demand increases when income increases and falls when income decreases, all other factors being equal.

Income Increased

A rise in the amount of money earned from work, investments, or other sources.

Consumption of Strawberries

Refers to the amount of strawberries that are eaten or used by consumers within a specific period.