Dividends Received by a Parent from a Subsidiary Are Accounted

question 18

Multiple Choice

Dividends received by a parent from a subsidiary are accounted for:

• A)As revenue to the parent since the parent has been recording the investment in the subsidiary using the cost method on its own non-consolidated financial statements.
• B)As a transfer to cash since no intragroup realized profit transactions are required to be recorded.
• C)As a reduction of cost of sales on the parent's income statement.
• D)None of the above

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Definitions:

National Cultures

The set of shared values, beliefs, traditions, and practices that defines the people of a particular country or nation.

International Business

Engagements in commercial transactions across national borders, including trade, investment, and operational activities.

Cultural Intelligence

The ability to operate efficiently across different nationalities, ethnic groups, and within various organizational cultures.

Culture

The shared values, beliefs, norms, and practices that characterize a group of people or an organization, shaping behavior and influencing how members interact.