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:

Obedience

The act of following orders or instructions from an authority figure, often studied in psychology to understand the extent and limits of control over human behavior.

Normative Social Pressure

The influence of other people that leads an individual to conform in order to be liked and accepted by them.

Group's Power

The collective capacity of a group to influence, control, or direct individuals or outcomes based on group cohesion, size, and resources.

Stanley Milgram

A psychologist best known for his controversial experiments in the 1960s on obedience, which highlighted the power of authority figures to compel individuals to perform actions against their personal conscience.