A Ltd Sells to Its Subsidiary, J Ltd, an Item

question 20

Multiple Choice

A Ltd sells to its subsidiary, J Ltd, an item of inventories on 1 January 2017 for $6 000. The item cost A Ltd $3 000 earlier in the current year. J Ltd intends to use the item as plant with a useful life of 10 years, and no estimated salvage value. A straight-line depreciation rate of 10% p.a. is applicable. The tax rate is 30%. The worksheet entry for the year ended 30 June 2017 would include the following adjustment:

• A) Dr Plant $3 000.
• B) Cr Plant $3 000.
• C) Dr Inventories $3 000.
• D) Cr Inventories $3 000.

Recognize the different elements of the operating cycle and operating expenses in merchandising and service companies.

Understand the concept of contra accounts and their impact on financial reporting.

Grasp the principles of closing entries and their effects on accounts.

Understand the importance and methodology of accurate medical coding.

---

Definitions:

Audience's Attitudes

The collective feelings, beliefs, and opinions held by the group of people targeted by a message or presentation, which can significantly influence their reception of the communicated material.

Reader's Expectations

The assumptions or beliefs regarding what readers anticipate or look for in a piece of writing, based on its context, genre, or purpose.

Planning Stage

An initial phase in a project or process where objectives are defined, and strategies are developed to achieve them.

Usability Testing

A method of evaluating a product or system by testing it with real users to gauge how easy and efficient it is to use.