Which Statement Is Not Correct About "Control

question 55

Multiple Choice

Which statement is not correct about "control"?

• A)Control is presumed when an entity has more than 50% of the voting power of the investee.
• B)Having control allows the entity to direct the strategic operations of the investee.
• C)Control is presumed when an entity owns more than 50% of the investee.
• D)Consolidation is used when an entity has control over the investee.

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Definitions:

Operating Leverage

A financial metric that indicates how a company's operating income reacts to a change in sales volume, showing the degree of fixed versus variable costs.

Sales Increase

A rise in the amount of goods or services sold, often measured as a percentage increase over a previous period.

Contribution Format

A method of income statement presentation that stresses the contribution margin, which is sales revenue minus variable costs.

Income Statement

A financial statement that shows a company’s revenues and expenses over a specific period, resulting in net profit or loss.