Which of the Following Intercompany Transactions Creates Temporary Book/tax Differences

question 86

Multiple Choice

Which of the following intercompany transactions creates temporary book/tax differences when a parent corporation owns 100% of a subsidiary's stock and the companies file a consolidated return?

• A)intercompany dividends
• B)undistributed subsidiary earnings
• C)intercompany sale
• D)None of the above items create temporary differences.

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Definitions:

Win/Win

A negotiation or interaction outcome where all parties involved benefit or achieve their objectives.

Upward Communication

The process of information flow from the lower levels of a hierarchy to the upper levels within an organization.

Downward Communication

The flow of information from higher levels of a hierarchical organization to lower levels, typically involving directives and updates.

Structured Manager

A leader who organizes, plans, and outlines specific roles, responsibilities, and procedures to achieve goals effectively.