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

question 2

Multiple Choice

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

• A) The requirement to eliminate the effects of intragroup transactions holds whether or not there are non-controlling interests.
• B) The non-controlling interest's share in the dividends paid or proposed by the subsidiary is 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 unrealised from the economic entity's perspective.
• D) Management fees paid in an intragroup transaction is considered realised when determining non-controlling interests in a subsidiary.
• E) None of the given answers.

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Definitions:

Behavioral Economics

A field of economics that examines how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions and how those decisions vary from those implied by classical theory.

Systematic Error

A consistent, predictable error present in the method of measurement that affects the accuracy of results.

Faulty Heuristics

Cognitive shortcuts that lead to errors in judgment or decision-making.

Heuristics

Simple, efficient rules, often learned or instinctive, that help in making decisions, forming judgments, or solving problems.