'Control' Exists When the Parent Owns Less Than Half of the Voting

question 1

Multiple Choice

'Control' exists when the parent owns less than half of the voting power of an entity when:

• A) no other entity owns more than half either.
• B) there is power to govern the financial and operating policies of the entity under a statute.
• C) there is power to govern the financial and operating policies of the entity under an agreement.
• D) there is power to govern the financial and operating policies of the entity under a statute and there is power to govern the financial and operating policies of the entity under an agreement.
• E) no other entity owns more than half either, there is power to govern the financial and operating policies of the entity under a statute and there is power to govern the financial and operating policies of the entity under an agreement.

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Definitions:

Percent Change

A mathematical calculation that expresses the degree of change over time as a percentage.

Prepaid Insurance

An asset account that represents the cost of insurance paid in advance, which is expensed over the period the insurance coverage pertains to.

Account Group

A classification system used in accounting to organize similar accounts together, facilitating the management and reporting of financial information.

Interest Revenue

Income that a company earns from its investments in interest-bearing accounts or securities like bonds, loans, or savings.