AASB 3/IFRS 3 Is Relevant When Accounting for a Business

question 1

Multiple Choice

AASB 3/IFRS 3 is relevant when accounting for a business combination that:

• A) involves mutual entities.
• B) results in the formation of a joint venture.
• C) involves entities or businesses that are not investor owned.
• D) results in an entity acquiring the net assets of another entity.

---

Definitions:

Average Tax Rate

The ratio of the sum of taxes paid to the overall income, determined by dividing the total taxes paid by the total income.

Total Income

The sum of all earnings and revenues received by an individual or business, including wages, salaries, investment income, and revenue from sales or services.

Total Taxes

The aggregate amount of taxes paid by an individual, corporation, or other entity to governmental authorities within a specified period.

Payroll Tax

Taxes imposed on employers and/or employees, usually calculated as a percentage of the salaries that employers pay their staff.