In the Year When One Member of a Consolidated Group

question 6

Multiple Choice

In the year when one member of a consolidated group purchases from outside parties the bonds of another affiliate, the consolidated income statement includes:

• A)​a gain if purchased above book value.
• B)​a gain if purchased below book value.
• C)​a loss if purchased below book value.
• D)​a deferred gain if purchased above book value.

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Definitions:

Trade Barriers

Measures imposed by governments to restrict or control international trade, often to protect domestic industries.

Sugar

A sweet-tasting soluble carbohydrate obtained primarily from sugarcane and sugar beet, widely used as a sweetener in food and drinks.

Surplus Production

The situation where the quantity of goods produced exceeds the quantity of goods consumed.

Government Policies

Decisions or plans made by a government that influence the behavior of society or sectors of the economy.