Each question in this quiz is timed.
It arises where two or more entities have an arrangement between each other such that these entities have joint control over the arrangement
Joint Arrangement
Joint Operation
Joint Venture
Joint Account
The characteristics of a joint arrangement includes the following, except:
The parties are bound by a contractual arrangement
The contractual arrangement gives two or more parties joint control over the arrangement
There is a unanimous consent of the parties over the arrangement
There should be 50% interest over the corporate arrangement.
Joint control exists when there are the following items, except
There exists a contractually agreed sharing of control
There must be a unanimous consent of the parties
There is no single party that has control over the arrangement
The party that holds the substantial portion over the company must have a sole control over the arrangement.
A Corporation and B Corporation made an arrangement. A has a 50% interest over the entity. B has a share of 50%. The contract requires that 70 percent of the entity's interest must agree before making a decision over a particular activity. The contract is:
Partnership
Incorporation
Sales
A, B and C made an entity with agreed sharing in the entity's interest: 50%,20% and 30%. They agreed that a company can make a decision if at least 50% of the interest had been exercised. The contract has:
a joint control
no joint control
joint management
absolute control of party - C
A, B, C and D had decided to make an arrangement. The parties require that there may be unanimous vote for all the activities they are going to take. The contract has:
Joint Control
Significant Influence
Absolute Control of one party
Financial Interest only but no control
The accounting method for joint venture is:
Cost Method
Fair Value through profit or loss
Equity Method
Fair Value through Other Comprehensive Income
An example of a credit to Investment in Joint Venture account.
Initial Investment
Share in Net Income
Dividend Received
Change in accounting estimate
An example of debit to Investment in Joint Venture account.
Share in Net Loss
Share in Other Comprehensive Loss
Recording the share of net income from a joint venture will result to:
Decrease in Investment in Joint Venture account
Increase in Investment in Joint Venture account
No effect in Investment in Joint Venture account
Decrease in total equity
A joint arrangement may be:
A Corporation
A Partnership
A Financial Structure
All of the choices are correct
If the joint arrangement has no separate vehicle. The arrangement is a:
Corporation
A Joint Arrangement that has a separate vehicle is a:
Joint Management
Which of the following statement is false:
Under the Equity Method, a share in net income will result to an increase in the Investment account.
Under Equity Method, initial investment to a joint venture will result to an increase in the Investment account.
Under Equity Method, dividend received from a joint venture will result to a decrease in the Investment account.
Under Equity Method, dividend received from a joint venture will result to an increase in the Investment account.
Dividend received from a joint venture shall be treated in the Investor's books as
A Dividend Income
Expense
Return of Investment
Other Comprehensive Income
The method of accounting for joint operation
the Equity Method
Fair Value Method
The joint operator shall record his separate assets, liabilities, revenue and expenses in his separate books.
When the contractual arrangement establishes the allocation of revenues and expenses on the basis of the relative performance of each party to the joint arrangement. The arrangement is a:
none of the choices
When the contractual arrangement establishes that the parties to the joint arrangement are liable to the arrangement only to the extent of their respective investments. The arrangement is a:
The accounting for joint operation includes the following, except:
The joint operator must recognize the assets it controls in the arrangement
The joint operator must recognize the liabilities it incurs in the arrangement
The joint operator must recognize the share of revenue over the operation and the expenses that he incur
The joint operator must only recognize his share in the net assets over the arrangement
In a joint arrangement, the control may be joint but profit sharing is not necessarily equal
A party that participates in, but does not have joint control nor a significant influence, a joint venture shall account for its interest in the arrangement in accordance with PAS 39/PFRS 9 Financial Instruments
A joint venture accounting uses consolidation method in the financial statement preparation
A cash settlement may also be represented by the joint operator's account balance after recording investments, withdrawals and share in joint operation profit.
