When a Sale of Assets Amounts to What in Fact

question 52

True/False

When a sale of assets amounts to what in fact is a consolidation,the ac-quiring corporation inherits the selling corporation's liabilities.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the operating cycle, whichever is longer.

Receivables

Amounts owed to a company by its customers arising from the sale of goods or services on credit.

Bad Debt Expense

An estimated expense that represents accounts receivable that a company does not expect to collect due to customer defaults.

Uncollectible Accounts Expense

An expense account that represents money owed to a company that is not expected to be collected due to customer defaults.