In Relation to Pre-Acquisition of a Subsidiary Entity, Which of the Following

question 22

Multiple Choice

In relation to pre-acquisition of a subsidiary entity, which of the following events can cause a change in the pre-acquisition entry subsequent to acquisition date?
I Transfers from post-acquisition retained earnings
II Bonus dividends paid from pre-acquisition equity
III Transfers from pre-acquisition retained earnings
IV Impairment of goodwill

• A) I, II, III and IV
• B) I, III and IV only
• C) II and III only
• D) III and IV only.

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Definitions:

Variance

A statistical measure that captures the dispersion of a set of data points around their mean, indicating how spread out the data is.

Probability Range

A span of values within which a random variable is expected to fall, governing the likelihood of different outcomes.

Risk Premium

The return in excess of the risk-free rate of return that investors demand for choosing a risky investment.