When a Joint Operator Is Accounting for an Interest in Joint

question 23

Multiple Choice

When a joint operator is accounting for an interest in joint operation it is required to recognise which of the following in its financial statements? $\begin{array}{c}\begin{array}{lll}\\ \text { I.The assets that it controls}\\\text { II. The liabilities that it incurs}\\\text { III.Its share of income from the sale of goods }\\\text { by the joint operation}\\\text { IV. The expenses that it incurs}\end{array}\begin{array}{l}\text { I }\\\text { Yes}\\\text { Yes}\\\text { Yes}\\\\\text { Yes}\end{array}\begin{array}{l}\text { II }\\\text { Yes }\\\text {Yes}\\\text {No}\\\\\text {No}\end{array}\begin{array}{l}\text { III} \\\text { Yes } \\\text { No } \\\text { Yes }\\\\\text {No} \end{array}\begin{array}{l}\text { IV } \\\text { Ye } \\\text { No } \\\text { No } \\\\\text { No } \end{array}\end{array}$

• A) I
• B) II
• C) III
• D) IV

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Definitions:

Contract Maturity

The specified date on which the contract expires and the financial transaction must be settled or completed.

Basis

In finance, basis refers to the difference between the spot price of an asset and its future price, or it can signify the foundation or underlying principle for something.

Risk-free Interest Rate

The risk-free interest rate is the return on investment with no risk of financial loss, typically represented by the yields of government bonds of stable countries.

Gold Futures

Contracts for the future delivery of gold at a specified price, used for hedging and investing purposes.