When Eliminating Any Unrealised Profit Arising When a Joint Operator

question 16

Multiple Choice

When eliminating any unrealised profit arising when a joint operator provides services to a joint operation the profit is eliminated against:

• A) the investment in the joint operation;
• B) retained earnings;
• C) work in progress, finished goods and other inventory related accounts;
• D) cost of sales.

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Definitions:

Preincorporation Subscriptions

Agreements by investors to purchase stock in a corporation that is yet to be formed.

Promoter

An individual or company that helps to raise capital, organize, and establish a corporation or project, often taking on both financial and legal responsibilities in the early stages.

Preliminary Steps

Initial actions or measures taken as preparation for a more significant process or project.

Doctrine

A principle or set of principles laid down by an authority as incontrovertibly true.