Which of the Following Statements Are Incorrect with Regards to Pre-Acquisition

question 21

Multiple Choice

Which of the following statements are incorrect with regards to pre-acquisition entries prepared after acquisition date?

• A) are adjusted for transfers between post-acquisition equity accounts.
• B) are adjusted for the changes in the investment account recognised by the parent in the subsidiary.
• C) include the pre-acquisition entry prepared at acquisition date adjusted for the effects of all the transfers between pre-acquisition equity accounts and changes in the investment account up to the beginning of the current period.
• D) reverse the transfers between pre-acquisition equity accounts and changes in the investment account that happen in the current period.

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Definitions:

Settlor

A person who creates a trust by providing the initial trust property and setting the terms of the trust.

Federal Estate Tax

A tax levied by the federal government on the transfer of the taxable estate of a deceased person, whether transferred via will, according to state laws, or through an estate plan.

State Inheritance Tax

A tax imposed by some states on individuals who inherit property or money from someone who has died.

Estate Administration

The process of managing and distributing a deceased person's assets according to their will or the laws of intestacy.