The Line-By-Line Method of Accounting for Interests in Jointly Controlled

question 28

Multiple Choice

The line-by-line method of accounting for interests in jointly controlled entities is recommended by AASB 11 because:

• A) it reflects the venturer's control over the future economic benefits.
• B) it is the method used for jointly controlled operations and jointly controlled assets, which only differ from jointly controlled entities in their legal form.
• C) it is consistent with the legal form of a joint arrangement.
• D) none of the above.

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Definitions:

ATC

Average Total Costs, which is the sum of all production costs (fixed and variable) divided by the quantity of output produced, detailing the average cost per unit of output.

Economic Conditions

The state of an economy at a given time, encompassing factors such as inflation, unemployment rates, and GDP growth.

Decreasing-Cost Industry

An industry where average costs of production decrease as the industry grows and output increases, due to factors like technology improvements or economies of scale.

Entry

The act of entering or joining a particular market or area of business, often considered in terms of barriers that might exist to hinder new competitors.