A "Free" Chequing Account with a Minimum Balance of $500

question 70

True/False

A "free" chequing account with a minimum balance of $500 has no opportunity cost.

Identify and apply the equity method of accounting for investments in associates, including recognizing the investor's share of profits and losses.

Understand the journal entries required to record the acquisition, dividends received, and the revaluation of investments.

Distinguish between different methods of accounting for investments and the scenarios in which they are applied.

Understand the impact of dividends paid by the investee on the investment's carrying value.

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Definitions:

Break-Even Point

The sales level at which total revenues equal total costs, resulting in no profit but no loss.

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, showing how much contributes to fixed expenses and profits.

Sales Mix

Sales mix refers to the proportion of different products or services sold by a company, impacting its overall profitability and performance.

Fixed Costs

Expenses that remain constant regardless of business activity levels, including property leases and managerial salaries.