Which of the Following Statements Is Incorrect with Respect to Parent-Subsidiary

question 83

Multiple Choice

Which of the following statements is incorrect with respect to parent-subsidiary corporations?

• A)With a consolidated return,net losses of one company can offset net income from another company.
• B)A parent-subsidiary group must file a consolidated tax return.
• C)A parent-subsidiary group is one where a common parent corporation owns,directly or indirectly,at least 80% of one or more other corporations.
• D)If a consolidated tax return is filed,losses on intercompany sales cannot be immediately recognized.

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Definitions:

Relay Division

This term does not specify a widely recognized concept or key term in a general context and may refer to a specific internal department or team within an organization focused on relaying or transferring goods, services, or information.

Variable Expenses

Costs that change in proportion to the activity of a business, such as sales volume or production levels.

Transfer Price

The price at which goods or services are transferred between departments or divisions within the same company, often used for accounting and tax purposes.

Industrial Products Division

A subsection of a company focused on the production and sale of goods used in industrial and commercial applications.