The General Ledger Account Representing the Subsidiary Ledger Is Known

question 18

Multiple Choice

The general ledger account representing the subsidiary ledger is known as a control account because:

• A) inclusion of both control accounts and subsidiary ledger accounts in the general ledger improves control.
• B) the accuracy of the detailed accounts in the subsidiary ledger can be checked against the aggregate data and the balance contained in it.
• C) subsidiary ledgers eliminate the need to record totals in the general ledger.
• D) it includes all transactions in the subsidiary ledger.

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Definitions:

Consideration Transferred

The value exchanged or payment made by an acquiring entity to obtain control of another business in a business combination.

Partial Equity Method

An accounting technique used for investments, where only a portion of the investment's change in net assets is recorded.

Noncontrolling Interest

A stake in a company that is not large enough to exert control over its operations, often reflected in consolidated financial statements.

Equipment Undervalued

A situation where the book value of equipment is less than its current market value or replacement cost.