JoJo Ltd Provided an Advance of $500 000 to Its

question 22

Multiple Choice

JoJo Ltd provided an advance of $500 000 to its subsidiary BoBo Ltd. Interest of $50 000 was charged during the year ended 30 June 2018. On consolidation, the following adjustment is needed at 30 June 2018 in relation to the interest charged:

• A) no adjustment needed.
• B) Dr Interest revenue $50 000 Cr Interest expense $50 000
• C) Dr Interest expense $50 000 Cr Interest revenue $50 000
• D) Dr Retained earnings $50 000 Cr Cash $50 000

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Definitions:

Monopoly Position

A situation in which a single company or entity has exclusive control over a particular market or industry, eliminating competition.

Lower Prices

A decrease in the general level of prices of goods and services, making them more affordable to consumers.

Additional Units

Incremental amounts or quantities of a good or service produced or consumed, often considered in economic analysis to assess changes in supply, demand, or efficiency.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers, typically downward sloping from left to right.