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

question 90

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

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Definitions:

Fairness

The quality of making judgments that are free from discrimination or favoritism, ensuring equitable treatment for all parties involved.

Effectiveness

A measure of the degree to which objectives are achieved and desired results are obtained.

Strictness

The quality of being rigid and exacting in standards or rules.

Brainstorming

A collaborative idea generation technique that encourages participants to propose a variety of solutions to a problem without judgment.