Which of these is not a characteristic of equity as specified in the Conceptual Framework?
A) It ranks after liabilities as a claim on assets.
B) It must be controlled by the entity.
C) It is diminished by unprofitable operations.
D) It cannot be calculated independently of assets and liabilities.

Question

Quizplus · Accepted Answer

Equity is essentially the residual interest in the assets of the entity after deducting liabilities, rather than something that must be controlled by the entity. Control is a concept more directly related to assets rather than equity.

Which of These Is Not a Characteristic of Equity as Specified