Answered: In which of the following instances…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In which of the following instances does Entity A have control over Entity B?

A. Entity A and Entity B both have unilateral rights in directing the relevant activities of Entity B. Entity A’s rights are considered protective rights.

B. Entity A’s right to direct Entity B’s relevant activities is exercisable only upon the occurrence of a contingency.

C. Entity A has the right to direct the relevant activities of Entity B but only in accordance with the directives of Entity C.

D. Entity A holds a 30-day forward contract to buy a majority of Entity B’s voting rights. The contract can be cancelled in a shareholders meeting. A Shareholders meeting will be held in 3 months’ time.

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