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:

ABC Approach

A behavioral management strategy focusing on Antecedent, Behavior, and Consequence to understand and modify behavior.

Albert Ellis

An American psychologist who developed Rational Emotive Behavior Therapy (REBT), a form of cognitive behavioral therapy.

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A condition of strain on one's emotions caused by various factors, often leading to physical and psychological health issues.

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The cognitive distortion that leads individuals to see an unfavorable outcome as the worst possible outcome, often far exceeding the actual situation.