Firm a and Firm B Join to Create Firm AB

question 78

Multiple Choice

Firm A and Firm B join to create Firm AB.This is an example of:

• A)a tender offer.
• B)an acquisition of assets.
• C)an acquisition of stock.
• D)a consolidation.
• E)Both B and C.

---

Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing what the owner has invested or kept in the business.

Proprietorship

A business structure owned by a single individual, where the owner and the business are legally treated as the same entity.

Accounting Principles

The standardized rules and guidelines that companies are required to follow when reporting financial data, ensuring consistency, reliability, and comparability of financial statements.

Owner's Equity

The residual interest in the assets of a company after deducting liabilities, representing the owners' share of the company’s assets.