Every Subsidiary Ledger Must Have Its Own

question 3

Multiple Choice

Every subsidiary ledger must have its own:

• A)control account.
• B)subsidiary account.
• C)general account.
• D)general ledger.

Comprehend the elements of control including power, relevant activities, and rights that confer power.

Understand disclosures and reporting requirements for consolidated financial statements.

Identify the need for uniform accounting policies and reporting periods within a group for the purpose of consolidated reporting.

Recognize how contractual relationships and potential voting rights influence control and the preparation of consolidated financial statements.

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Definitions:

Owner's Equity

Represents an owner's total investment in a company after subtracting liabilities from assets; it signifies the net value an owner has in the business.

Liabilities

Financial obligations or debts that a company owes to others, which must be paid back in the future.

Assets

Resources owned or controlled by a business or individual, expected to produce positive economic value or benefits in the future.

Balance Sheet

A financial document that provides a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time.