Which of the Following Statements Would Not Be a Valid

question 30

Multiple Choice

Which of the following statements would not be a valid or logical reason for entering into a business combination?

• A) to increase market share.
• B) to avoid becoming a takeover target.
• C) to reduce risk by acquiring established product lines.
• D) the operating costs of the combined entity would be more than the sum of the separate entities.

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Definitions:

Debit Balance

An accounting entry that represents a situation where debits exceed credits in an account, indicative of assets or expenses.

Adjusting Entry

A journal entry made in accounting records to update the balances of accounts at the end of an accounting period, ensuring that revenues and expenses are matched accurately.

Aging

A method used to categorize and manage accounts receivable based on the length of time they have been outstanding.

Accounts Receivable

Amounts owed to a company by its customers for goods or services delivered or used but not yet paid for.