There Are Many Forms of Business Combinations That Can Occur

question 20

Multiple Choice

There are many forms of business combinations that can occur. However, for which of the following are the requirements for accounting for a business combination NOT used?

• A)A acquires the assets only of B, and B pays off the liabilities and then liquidates.
• B)A acquires all the assets and only some of the liabilities of B, and B pays the remaining liabilities before liquidating.
• C)The business combination results in the formation of a joint venture.
• D)A acquires a group of net assets of B, the group of net assets constituting a business, such as a division, branch or segment, of B.

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Definitions:

Order For Relief

A court order in a bankruptcy case that allows the commencement of bankruptcy proceedings and the administration of the debtor's estate by a trustee.

Four-Year

A term typically related to a period of time, such as the duration of an undergraduate degree or the length of certain contracts.

Faking Records

The act of unlawfully altering or fabricating documents or records, often for deceptive purposes.

Concealing Assets

The act of hiding or failing to disclose assets to avoid legal responsibilities or to deceive creditors or other parties.