AASB 131 Describes a Jointly Controlled Entity as Being Differentiated

question 46

Multiple Choice

AASB 131 describes a jointly controlled entity as being differentiated from other types of entities (particularly associates) on the basis that:

• A) The function of a joint venture is different to all other types of entities because it does not have a focus on generating a profit.
• B) The contractual arrangement between the venturers establishes joint control over the economic activity of the entity.
• C) The function of a jointly controlled entity is to achieve a tax simplification for the venturers so that accumulated joint venture losses may more easily be carried forward to offset future profits of the venturers.
• D) The contractual arrangement between the venturers establishes joint and several liability for the liabilities of the jointly controlled entity.
• E) None of the given answers.

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Definitions:

Product Promotion

The marketing activities and strategies used to increase awareness and sales of a product.

Total Profits

The net income a company or individual earns after subtracting all costs, expenses, and taxes from total revenue, indicating the overall financial performance.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing for limited control over market prices.