Which of the Following Must Be Possible in Order for a Business

question 57

Multiple Choice

Which of the following must be possible in order for a business combination to exist?

• A) Control of a subsidiary's net assets that constitute a business
• B) Ownership of 100 % of a subsidiary's voting shares
• C) Ownership of all of a subsidiary's assets
• D) Ownership of all of a subsidiary's operating assets

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Definitions:

Net Credit Sales

The total revenue from sales made on credit after deducting any returns or allowances, representing the true credit sales figure.

Percentage-of-Sales Basis

A method used in budgeting and planning where certain costs or expenses are based on a fixed percentage of sales.

Accounts Receivable

Money owed to a business by its clients for goods or services that have been delivered but not yet paid for.

Allowance for Doubtful Accounts

A contra-asset account representing the estimated amount of receivables that may not be collected, reducing net accounts receivable to a more realistic value.