Alpha Corp and Beta Inc Recently Merged

question 18

Multiple Choice

Alpha Corp and Beta Inc recently merged.Prior to the merger,both companies manufactured tools.The merged company continued to do so after the merger.Technically speaking,the parties were involved in a

• A)fusion merger.
• B)diversification merger.
• C)vertical merger.
• D)parallel merger.
• E)horizontal merger.

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Definitions:

Conversion

The act of changing something into a different form or entity, often used in marketing to refer to turning prospects into customers.

Cash-Basis Accounting

An accounting method where revenues and expenses are recorded when cash is received or paid, rather than when earned or incurred.

Accrual-Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when the cash is received or paid.

Liquidity-Basis

A measurement or approach focusing on how quickly assets can be converted into cash without affecting their value.