The Factors That Are Taken into Consideration in Determining Whether

question 14

Multiple Choice

The factors that are taken into consideration in determining whether or not an entity should be consolidated under AASB 127 include:

• A) The nature of the legal form of the entity and whether or not the 'parent' entity owns enough of the equity in the entity to effectively control the benefits that flow from the relationship with the other entity.
• B) Whether or not the potential 'parent' entity controls the other entity.
• C) The number of members on the board under the control of the potential 'parent' entity, and whether or not the other entity has been partitioned by the potential 'parent' entity.
• D) Whether or not the potential 'parent' entity controls the other entity and whether or not it is in a significantly different business to the potential 'parent'.
• E) None of the given answers.

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Definitions:

Aggregate Demand Curve

A graphical representation showing the total demand for all goods and services in an economy at different price levels.

Aggregate Supply Curve

A graphical representation that shows the total quantity of goods and services producers are willing to supply at different price levels in an economy.

Consumer Price Index

An index that looks at the weighted average prices of a collection of consumer products and services, like food, transportation, and healthcare, to gauge inflation.

Price Level

An overall average price for the complete array of goods and services in the economy.