Which of the Following Statements Best Describes the Application of the Continuity

question 40

Multiple Choice

Which of the following statements best describes the application of the continuity of enterprise principle to a Type A tax-deferred reorganization?

• A) The continuity of business enterprise principle must be satisfied for only the target corporation.
• B) The continuity of business enterprise principle must be satisfied for both the acquirer and the target corporation.
• C) The continuity of business enterprise principle does not have to be satisfied as long as the business purpose principle is satisfied.
• D) The continuity of business enterprise principle must be satisfied for only the acquirer.

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Definitions:

Social-Responsibility Norm

A societal rule that people should help those who need them without expecting anything in return.

Homeless

The state of having no stable or permanent place to live.

Social Traps

Situations wherein individuals or groups make decisions that are rational and beneficial short-term but lead to negative outcomes in the long-term for the individual or collective.

Psychologists

Professionals in the field of psychology who study mental processes and behavior in humans and animals.