• 1 Marks

FA – Nov 2011 – L1 – SA – Q18 – Accounting Concepts

This question asks about the part of minimum rent in royalties not represented by the use of rights in a mine.

The part of the minimum rent in royalty NOT represented by the use of the rights in respect of a mine is known as
A. Dead rent
B. Mine royalty
C. Minimum income
D. Short workings
E. Patent income

D. Short workings

Explanation: Short workings refers to the situation where the royalty paid based on actual production is less than the agreed minimum rent (dead rent). The lessee may have the right to recover short workings in future periods when production increases.

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