- 1 Marks
Question
The least amount of royalty payable by the lessee and sub-lessee, if any, irrespective of the actual royalty is called:
Answer
Minimum royalty payable / dead rent
Explanation:
Minimum royalty, also known as dead rent, is the least amount of royalty that must be paid by the lessee, regardless of the actual output or earnings from the lease. This ensures that the lessor receives a minimum payment even if actual production or earnings are low.
- Tags: Accounting for Royalties, Lease Agreements, Royalty
- Level: Level 1
- Topic: Recording Financial Transactions
- Series: MAY 2012
- Uploader: Theophilus