Which of the Following Is NOT a Financial Motive, but Rather

question 74

Multiple Choice

Which of the following is NOT a financial motive, but rather an operating motive, for merger and consolidation?

• A)The portfolio diversification effect
• B)Tax loss carryforward
• C)Greater financing capability
• D)Synergy

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Definitions:

Permanent Accounts

Permanent accounts refer to the balance sheet accounts whose balances are carried over into the next accounting period, including assets, liabilities, and equity accounts.

Revenue Recognition Principle

An accounting principle that dictates the specific conditions under which revenue is recognized or recorded, ensuring it's captured in the period it is earned.

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous accounting period, simplifying record-keeping.

Profit Margin

A financial ratio calculated as net income divided by revenue, expressing the percentage of each dollar of revenue that remains as profit.