A Merger Occurs When

question 22

Multiple Choice

A merger occurs when:

• A)one firm buys controlling interest in another firm
• B)two firms agree to integrate their operations on a relatively coequal basis
• C)two firms combine to create a third separate entity that conducts one given function
• D)two firms agree to share certain information, but their operations remain independent

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Definitions:

Net Income

Net income is the total profit of a company after all expenses and taxes have been subtracted from total revenue.

Hedge Accounting

Accounting techniques that modify the standard rules of accounting to recognize the offsetting effects on the financial statements of both the hedged item and the hedging instrument.

Mandatory

Required or obligatory; something that must be done or adhered to.

Optional

Referring to a choice or discretion available in a process or decision, where participation or selection is not mandatory.