A Dividend Paid by a Subsidiary Out of Pre-Acquisition Profits

question 16

True/False

A dividend paid by a subsidiary out of pre-acquisition profits will always result in the parent company's investment in subsidiary asset being impaired.

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Definitions:

Zoosporangium

Structure in which zoospores form.

Zoospore

A flagellated motile spore produced asexually by chytrids, certain algae, water molds, and other protists.

Antibiotics

Medicinal substances used to treat bacterial infections by either killing bacteria directly or inhibiting their growth.

Chytrid

A group of mostly aquatic fungi that play a role in decomposing organic matter and can sometimes be harmful to amphibians.