Question

When preparing consolidated financial statements, examples of intragroup transactions include all of the following, except for:...

When preparing consolidated financial statements, examples of intragroup transactions include all of the following, except for:

a. The parent company rents an office building that it owns to one of its subsidiaries

b. A subsidiary sells some of its equipment to its parent company

c. A subsidiary provides consultation services to its parent company

d. A parent company pays dividends to its shareholders

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Answer #1

Correct answer is option D

Although the dividend paid by the parent company is reported in the consolidated financial statements but the amount paid by the parent company to its shareholders is not a part of intra group transaction because the same doesn't related to the transactions held by companies between the same group rather it is a payment of the company to its shareholders as a part of their share in profits of the company.

The option a,b & c are the examples of intra group transactions because they held between the companies within the same group.

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