Which of the Following Is Correct About the Concept of 'Control

question 11

Multiple Choice

Which of the following is correct about the concept of 'control' in the recognition of assets?

• A) Control relates to the capacity of a reporting entity to benefit from an asset and to deny or regulate the access of others to the benefit.
• B) The capacity to control would not normally stem from legal rights.
• C) Control is not required before an asset can be shown within the body of an entity's balance sheet (statement of financial position).
• D) Controlled assets are always owned.

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Definitions:

Comparative Common-Size Balance Sheet

A balance sheet that presents financial figures as percentages of a total in order to facilitate year-over-year and company-to-company comparisons.

Significant Changes

Important alterations that can have a substantial impact on a company's operations, financial performance, or strategy.

Balance Sheet Components

The major sections of a balance sheet, typically including assets, liabilities, and shareholders' equity.

Average Operating Assets

The average value of assets utilized in the regular operations of a business to generate earnings, calculated over a certain period.