In Relation to the Supply of a Service to a Joint

question 24

Multiple Choice

In relation to the supply of a service to a joint operation by one of the joint operators, which of the following statements is correct?

• A) a joint operator can recognise 100% of the earned through the supply of services to the joint operation;
• B) a joint operator is entitled to recognise a profit from the supply of services to itself;
• C) a joint operator cannot earn a profit on supplying services to itself;
• D) a joint operator is not able to recognise the service revenue or service cost for the services supplied to the joint operation.

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Definitions:

Repurchase

Also known as a buyback, it is a company's decision to buy its own shares from the marketplace, potentially raising the value of remaining shares.

Tax Advantages

Financial benefits derived from tax laws that reduce the amount of tax to be paid by allowing certain deductions, credits, or deferrals.

IRS

The Internal Revenue Service, the United States government agency responsible for tax collection and tax law enforcement.

Signaling Effects

The idea that actions taken by a company, such as dividend payments or changes, can provide information to the market about its future prospects.