Under the Provisions of AASB 116,concerning an Asset That Has

question 23

Multiple Choice

Under the provisions of AASB 116,concerning an asset that has been re-valued upward,which statement is correct?

• A) If the asset is disposed of, the revaluation surplus can remain in the accounts after the disposal of the asset that created it
• B) The amount of the revaluation increment is included in equity without being included in net profit
• C) Neither of the statements is correct
• D) Both of the statements are correct

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Definitions:

Short Run

A period of time during which at least one input of production is fixed, affecting the firm's ability to adjust production levels.

Variable Cost

A cost that depends on the quantity of output produced; the cost of a variable input.

Average Total Cost

This is the sum of all the costs of production (fixed and variable) divided by the number of units produced, providing a comprehensive understanding of production expenses.

Market Price

The price at which a good or service is offered in the marketplace, determined by supply and demand.