When a Dividend Is Paid by a Wholly-Owned Subsidiary Out

question 1

Multiple Choice

When a dividend is paid by a wholly-owned subsidiary out of pre-acquisition equity, the parent entity recognises:
This is explained more in Chapter 26.

• A) a reduction in the investment in the subsidiary
• B) a decrease in share capital
• C) an increase in dividend income
• D) a decrease in dividend revenue.

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Definitions:

Simultaneous Game

A game in game theory where all players make decisions or choose strategies at the same time without knowledge of the others' choices.

Utility

A measure of satisfaction, usefulness, or pleasure derived from consuming goods and services.

Efficient Outcome

A situation in economics in which resources are allocated in the most effective manner, maximizing the potential benefit to an economy or market without wasting resources.

Utility

In economics, a measure of satisfaction or happiness that consumers get from consuming goods or services.