Here is the answer I gave:
It is important to understand the doctrine of the eternal nature of man and some of the processes through which he has passed.
First: Man is intelligence which cannot be created or made (D&C 93:29). Intelligence is the material from which spirits are made. This is the eternal aspect of man. There are divergent views on intelligence in the Church as to whether an intelligence is an entity with self awareness or a mass of material without entity or self awareness. The Church has taken no official position on either of these two concepts. You can see this referenced in the Encyclopedia of Mormonism below under the title of “Intelligence.”
Second: from intelligence man progressed to become spirit children of God, this is the phase of their creation in the image and likeness of God and where He becomes their father and creator.
Third: intelligences/spirits were placed into the physical bodies of man in which the body and spirit together are called by God the “soul” of man (D&C 88:15).
Sometimes the way we use vocabulary in reference to these concepts confuses the way we view our nature. Sometimes intelligence is referred to as spirit. Organized intelligences are referred to as spirits such as in Abraham 3:22. Sometimes soul is used to refer to a spirit and other times it is used to refer to spirit and body together. Therefore, the context of the term and how it is used becomes more important than the term itself. You will see some of this in the quotes below.
Here are two entries in the Encyclopedia of Mormonism - one on "Intelligence" and the other on "Intelligences."
Intelligence, however defined, is not created or made (D&C 93:29); it is coeternal with God (TPJS, pp. 353-54). Some LDS leaders have interpreted this to mean that intelligent beings-called intelligences-existed before and after they were given spirit bodies in the premortal existence. Others have interpreted it to mean that intelligent beings were organized as spirits out of eternal intelligent matter, that they did not exist as individuals before they were organized as spirit beings in the premortal existence (Abr. 3:22; JD 7:57; 2:124). The Church has taken no official position on this issue.
Encyclopedia of Mormonism, 1-4 vols., edited by Daniel H. Ludlow (New York: Macmillan, 1992), p.692
The word "intelligences" (plural) occurs frequently in LDS literature, having reference to the period of the premortal existence of mankind. The term has received two interpretations by writers within the Church: as the literal spirit children of Heavenly Parents and as individual entities existing prior to their spirit birth. Because latter-day revelation has not clarified the meaning of the term, a more precise interpretation is not possible at present.
The scriptural source for the word "intelligences" is the book of Abraham 3:21-22. The Lord instructed the patriarch Abraham regarding the premortal experiences of all who have been or ever will be upon the earth. Among those events was the Council in Heaven, at which the Father's Plan of Salvation for his children was discussed. Abraham wrote of this, "Now the Lord had shown unto me, Abraham, the intelligences that were organized before the world was; for he stood among those that were spirits, and he saw that they were good; and he said unto me: Abraham, thou art one of them" (Abr. 3:22-23). The Prophet Joseph Smith spoke of intelligences as follows: "God himself, finding he was in the midst of spirits and glory, because he was more intelligent, saw proper to institute laws whereby the rest could have a privilege to advance like himself. The relationship we have with God places us in a situation to advance in knowledge. He has power to institute laws to instruct the weaker intelligences, that they may be exalted with himself, so that they might have one glory upon another, and all that knowledge, power, glory, and intelligence, which is requisite in order to save them" (TPJS, p. 354).
Concerning man's premortal existence, the Lord revealed to Joseph Smith, "Man was also in the beginning with God. Intelligence, or the light of truth, was not created or made, neither indeed can be" (D&C 93:29). "Intelligence," as used here, is singular, and it is not clear from this passage if it refers to individual, conscious identity. As noted, Abraham referred to the spirit offspring of God as organized intelligences, apparently using the word "intelligences" to mean "spirits." Church authorities have indicated that spirit birth was not the beginning. Spencer W. Kimball, then a member of the Quorum of the Twelve, wrote, "Our spirit matter was eternal and co-existent with God, but it was organized into spirit bodies by our Heavenly Father" (The Miracle of Forgiveness, p. 5, Salt Lake City, 1969). Marion G. Romney, of the First Presidency, speaking of people's divine origin as children of God, stated, "Through that birth process, self-existing intelligence was organized into individual spirit beings" (Ensign 8 [Nov. 1978]:14). Bruce R. McConkie, an apostle, wrote:
Abraham used the name intelligences to apply to the spirit children of the Eternal Father. The intelligence or spirit element became intelligences after the spirits were born as individual entities (Abr. 3:22-24). Use of this name designates both the primal element from which the spirit offspring were created and also their inherited capacity to grow in grace, knowledge, power, and intelligence itself, until such intelligences, gaining the fulness of all things, become like their Father, the Supreme Intelligence [MD, p. 387].
While the revelations leave no doubt as to the existence of intelligent matter prior to its being organized as spirits, speculation sometimes arises regarding the nature of premortal existence and whether there was individual identity and consciousness prior to birth as a spirit. Some hold that the terms "intelligence" and "intelligences" have reference to a form of prespirit conscious self-existence, which included individual identity, variety, and agency (so reasoned B. H. Roberts, pp. 401-423). Others maintain that while these characteristics, attributes, and conditions are eternal, they essentially came together for each individual at the spirit birth. The question of whether prespirit intelligence had individual identity and consciousness remains unanswered. Elder Joseph Fielding Smith gave this caution in 1936:
Some of our writers have endeavored to explain what an intelligence is, but to do so is futile, for we have never been given any insight into this matter beyond what the Lord has fragmentarily revealed. We know, however, that there is something called intelligence which always existed. It is the real eternal part of man, which was not created or made. This intelligence combined with the spirit constitutes a spiritual identity or individual [p. 10].
No formal pronouncements have been made by the leading councils of the Church to clarify what additional meanings and attributes may be assigned to the word "intelligences," beyond that which identifies intelligences as spirit children of God.
[See also First Estate; Intelligence; Premortal Life; Spirit Body.]
Encyclopedia of Mormonism, 1-4 vols., edited by Daniel H. Ludlow (New York: Macmillan, 1992),, p.693
McConkie, Bruce R. Mormon Doctrine, pp. 386-87. Salt Lake City, 1966.
Roberts, B. H. "Immortality of Man." IE 10 (Apr. 1907):401-423.
Smith, Joseph Fielding. Progress of Man. Salt Lake City, 1936.
PAUL NOLAN HYDE
Encyclopedia of Mormonism, 1-4 vols., edited by Daniel H. Ludlow (New York: Macmillan, 1992), pp.692-693
Question: "If God is all powerful, why is he not able to create intelligence? In the Doctrine and Covenants, Section 93, verse 29, we read that 'intelligence or the light of truth was not created nor indeed can be.' If he is all powerful, why does he permit evil to rule in the world?"
Answer: Perhaps the time will not come while mortality endures that questions of this kind will not be propounded. The first thought that comes is that such questions should be ignored, but as they recur from time to time perhaps it is wisdom to answer them. Moreover, we might present other questions that belong in the same category. Did the Lord create time or space? How foolish such a question appears. The Lord has endowed men with some degree of intelligence or spirit of reason which he expects them to use.
The Lord revealed to the Prophet Joseph Smith this great truth: That matter is co-eternal with God and always existed. It would have been more reasonable to have presented this question, since many in the Christian world are imbued with the idea that God created matter out of nothing.
Joseph Fielding Smith, Answers to Gospel Questions, 5 vols., 3:, p.124-125
Intelligence Co-Eternal With God
If the Lord declares that intelligence, something which we do not fully understand, was co-eternal with him and always existed, there is no argument that we can or should present to contradict it. Why he cannot create intelligence is simply because intelligence, like time and space, always existed, and therefore did not have to be created. However, intelligences spoken of in the Book of Abraham were created, for these are spirit children of God, begotten sons.
Now the Lord had shown unto me, Abraham, the intelligences that were organized before the world was; and among all these there were many of the noble and great ones; (Abraham 3:22.)
From among these the Father chose his rulers.
How foolish it is to declare that God, our Eternal Father, is not all-powerful because there are some things that were not created, but which always existed. The fact is that he has put all such things to use. He has organized, arranged, and controls and works in harmony with all things which eternally existed.
President Harold B. Lee, Conference Report, October 1970, General Priesthood Meeting, p.115-
The participants in the formulation of this plan in the premortal world were all the spirit children of our Heavenly Father. Our oldest scriptures, from the writings of the ancient prophets Abraham and Jeremiah, affirm also that God, or Eloheim, was there; his Firstborn Son, Jehovah, Abraham, Jeremiah, and many others of great stature were there.
All the organized intelligences before the earth was formed, who had become spirits, were there, including many great and noble ones whose performance and conduct in that premortal sphere qualified them to become rulers and leaders in carrying out this eternal plan.
Joseph Fielding Smith, Answers to Gospel Questions, 5 vols., 3:, p.125-125