Under Current Accounting Standards,a Dividend Declared by a Subsidiary from Pre-Acquisition

question 21

Multiple Choice

Under current accounting standards,a dividend declared by a subsidiary from pre-acquisition equity will be recognised by the parent company as:

• A) revenue.
• B) a reduction in the investment in subsidiary asset.
• C) not recognised.
• D) none of the above.

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Definitions:

B2C

Business-to-Consumer, a commercial transaction model where businesses sell products or services directly to the end-users or consumers.

C2B

Consumer-to-Business, a business model where consumers create value or products that businesses purchase.

B2B

Business-to-Business, a model that involves transactions between two firms rather than between a firm and individual consumers.

Ordering Cost

The expenses incurred in placing and receiving orders for materials or products, including paperwork, communication, and transportation costs.