Janus Limited,a Subsidiary Entity,sold a Non-Current Asset at a Profit

question 3

Multiple Choice

Janus Limited,a subsidiary entity,sold a non-current asset at a profit to its parent entity.The adjustment necessary on consolidation to reflect the tax effect of this transaction will result in an:

• A)increase in deferred tax assets
• B)decrease in deferred tax liabilities
• C)increase in retained earnings
• D)decrease in retained earnings.

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Definitions:

Prototypical Concepts

Fundamental ideas that represent the most typical and best examples within a category or class.

Phoneme

The smallest unit of sound in a language that can distinguish one word from another, playing a critical role in phonetics and linguistics.

Basic Sound Unit

The smallest unit of sound in a language that can convey a distinct meaning, for example, a phoneme.

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