At the Date of Acquisition a Subsidiary Had Recorded a Dividend

question 19

Multiple Choice

At the date of acquisition a subsidiary had recorded a dividend payable of $10 000.The consolidation adjustment needed at the date of acquisition in relation to this event is:

• A)DR Dividend payable $10 000 CR Dividend receivable $10 000
• B)DR Dividend revenue $10 000 CR Dividend declared $10 000
• C)DR Shares in subsidiary $10 000 CR Dividend receivable $10 000
• D)DR Cash $10 000 CR Shares in subsidiary $10 000.

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Definitions:

Reportable Segment

A distinct business segment of a company that can generate its own revenues and expenses and whose operating results are regularly reviewed by the company's management.

Operating Segment

A component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, including segments with intersegment revenues.

Revenue Test

A criterion used to determine the significance of a segment or component of a business by comparing its revenue to a set percentage of the total revenue of the entire entity.

Total Revenues

The aggregate amount of income generated from normal business operations, including sales of goods and services, before any expenses are deducted.