Although the Australian Taxation Office (ATO)requires That Business Taxpayers Ascertain

question 56

True/False

Although the Australian Taxation Office (ATO)requires that business taxpayers ascertain the cost of
inventory using absorption costing,it does not specify the capacity concept that the taxpayer should use to calculate the fixed production cost per unit.

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Definitions:

Operating Segments

Components of a business that engage in operations that earn revenues, incur expenses, and are reviewed regularly by the company's management.

Reportable Segment

A component of a business that generates revenues and expenses related to the business’s operations, and whose financial results are regularly reviewed by the entity’s chief operating decision maker.

Minimum Revenue

The lowest amount of income considered acceptable or necessary for a company or project to stay viable.

Asset Test

A measure of the liquidity of a company by comparing its liquid assets to its current liabilities.