Multiple choice question

ques 1 The pre-acquisition entries are used to:

1. eliminate the investment in the subsidiary and the pre-acquisition equity of the subsidiary.
2. eliminate the investment in the subsidiary and the post-acquisition equity of the subsidiary.
3. eliminate the post-acquisition equity of the subsidiary.
4. eliminate the pre-acquisition equity of the subsidiary.

ques 2 The profit on an intragroup business transaction is 'realised' when:

1. the subsidiary sells to the parent.
2. there is involvement with an external party.
3. the parent sells to the subsidiary.
4. only entities within the group are parties to the transaction.