According to IFRS, a Company Makes Only a Memorandum Entry

question 7

Multiple Choice

According to IFRS, a company makes only a memorandum entry when

• A)Companies give warrants to executives and employees as a form of compensation.
• B)Companies include warrants to make a security more attractive.
• C)Companies issue rights to existing shareholders.
• D)All of the choices are correct.

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Definitions:

Average Rate of Return

This financial ratio measures the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.

Estimated Annual Net Income

The projection or forecast of a company's net income over a one-year period, considering all expected revenues and expenses.

Straight-Line Depreciation

A method of allocating the cost of a physical asset evenly over its useful life.

Average Rate of Return

The ratio of the average annual profit to the initial investment, expressed as a percentage, used to assess the profitability of an investment.