Which of the Following Situations Best Describes a Business Combination

question 44

Multiple Choice

Which of the following situations best describes a business combination to be accounted for as a statutory merger?

• A)Both companies in a combination continue to operate as separate,but related,legal entities.
• B)Only one of the combining companies survives and the other loses its separate identity.
• C)Two companies combine to form a new third company,and the original two companies are dissolved.
• D)One company transfers assets to another company it has created.

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Definitions:

Borrowed

The act of receiving funds from another party with the promise to return the principal amount along with interest or other charges.

Payment

The act of transferring money or goods in exchange for a product or service, or to fulfill a legal obligation.

Bank

A financial institution licensed to receive deposits and make loans.

Interest Earned

The income received from lending funds or depositing money into interest-bearing accounts.