AASB 128 Notes That in the Absence of Evidence to the Contrary,significant

question 22

Multiple Choice

AASB 128 notes that in the absence of evidence to the contrary,significant influence would normally exist where an investor holds:

• A) directly 20 per cent or more of the shares of another entity.
• B) directly 20 per cent or less of the voting power of another entity.
• C) directly 20 per cent or more of the total equity and debt on issue of another entity.
• D) directly, or indirectly, 20 per cent or more of the shares of another entity.
• E) None of the given answers.

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Definitions:

Operating Cycle

The duration it takes for a company to purchase inventory, sell products, and collect the cash from sales, measuring the efficiency of a business's cash flow.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income over a specific period of time.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a particular period.