The Balance of a Control Account in the General Ledger

question 109

Multiple Choice

The balance of a control account in the general ledger

• A) must always be zero.
• B) must equal the amount of total assets.
• C) is always greater than the composite balance of individual accounts in a related subsidiary ledger.
• D) must equal the composite balance of individual accounts in a related subsidiary ledger.

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Definitions:

Underlying Stock

The stock that must be delivered when a derivative contract, like an option or futures contract, is exercised.

Initial Cost

The initial expenditure involved in purchasing an asset or starting a project.

Exercise Price

The established price at which an option holder may execute the purchase (in a call option scenario) or sale (when dealing with a put option) of the related security or commodity.

European Call Option Delta

A measurement of the sensitivity of a European call option's price to a change in the price of the underlying asset.