According to GAAP, what is the key feature of a joint arrangement?
A) One venturer has a controlling interest in the joint arrangement.
B) More than one venturer has a controlling interest in the joint arrangement.
C) Joint control, namely, no one venturer can unilaterally control the venture regardless of the size of the equity contribution.
D)The two largest equity contributors will have joint control over the venture.

Question

Quizplus · Accepted Answer

According to GAAP, the key feature of a joint arrangement is joint control, meaning that no one venturer can unilaterally control the venture regardless of the size of the equity contribution. This means that options A and D are incorrect because they imply that one or only a few venturers have control over the joint arrangement. Option B is also incorrect because it implies that more than one venturer has a controlling interest, but does not clarify whether they have joint control or not.

According to GAAP, What Is the Key Feature of a Joint