Which of the Following Is the Best Definition of Consolidation

question 293

Multiple Choice

Which of the following is the best definition of consolidation?

• A) An interest controlling 50 percent of outstanding votes plus one; thereby it may decide the fate of the firm.
• B) Corporate takeover bid communicated to the shareholders by direct mail.
• C) A merger in which a new firm is created and both the acquired and acquiring firm cease to exist.
• D) The splitting up of a company into two or more companies.
• E) The distribution of shares in a subsidiary to existing parent company shareholders.

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Definitions:

Operating Income

Income from a company’s everyday business operations, calculated before taxes and interest.

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - as part of the cost of a produced unit.

Unit Product Cost

The total cost, including materials, labor, and overhead, divided by the number of units produced.

Year 2

Refers to the second year of a time-related context or sequence, not a standalone key term without additional context.