Under AASB 127,the Test for the Recognition of a Subsidiary

question 9

Multiple Choice

Under AASB 127,the test for the recognition of a subsidiary is:

• A) ownership by the investor of 100% of the shares in another company
• B) ownership by the investor of more than 50% of the shares in another company
• C) power by the investor to control the investee
• D) both B and C

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Definitions:

Fixed Cost

Expenses that remain unchanged regardless of the volume of goods or services produced within a certain range.

Trucking Department

A specialized unit or department within a company responsible for the management and operation of the fleet of trucks for transportation of goods.

Order Fulfillment Department

A division within a company responsible for processing customer orders and ensuring products are delivered to customers efficiently and accurately.

Variable Costs

Costs that vary in direct proportion to the level of production or business activity.