Which of the Following Statements Is Correct with Regard to Liabilities

question 101

Multiple Choice

Which of the following statements is correct with regard to liabilities in corporate reorganizations?

• A) While in a "Type A" merger, all the liabilities of the target must be acquired; in a consolidation, only general liabilities are transferred.
• B) In a "Type G" reorganization, the target's liabilities rarely are liquidated.
• C) Liabilities are problematic for a "Type C" only when the acquiring corporation transfers other property in addition to common stock.
• D) Long-term liabilities bonds) can be exchanged tax-free in a "Type E" reorganization as long as the terms of the bonds are greater than 10 years and the interest rates are identical.

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Definitions:

Variable Overhead Efficiency Variance

The difference between the actual hours taken to produce a good and the standard hours expected, multiplied by the variable overhead rate.

Favorable

A term often used in financial and operational reporting to indicate better-than-expected performance or results.

Unfavorable

A situation or condition that is disadvantageous, harmful, or detrimental, often used in financial contexts to describe variances or outcomes that negatively impact performance.

Labor Rate Variance

The difference between the actual labor rate paid and the standard labor rate expected, multiplied by the actual hours worked.