Following the accounting concept of a business combination,a business combination occurs when a company acquires an equity interest in another entity and has
A)at least 20% ownership in the entity.
B)more than 50% ownership in the entity.
C)100% ownership in the entity.
D)control over the entity,irrespective of the percentage owned.

Question

Quizplus · Accepted Answer

According to the accounting concept of a business combination, it occurs when a company acquires control over another entity, irrespective of the percentage of ownership. Therefore, option D, which states that control over the entity determines a business combination, is the best choice. Options A, B, and C are incorrect as they focus on the percentage of ownership, which may not always indicate control over the entity.

Following the Accounting Concept of a Business Combination,a Business Combination