Which of the Following Is Generally False When a Consolidation

question 51

Multiple Choice

Which of the following is generally false when a consolidation occurs?

• A) The new corporation has independent legal status.
• B) The shareholders of the new corporation create new articles of incorporation.
• C) The consolidated entity assumes the debts of the original corporations.
• D) The consolidated entity obtains the original corporations' assets.
• E) The consolidated entity does not obtain the original corporations' rights, powers, and privileges.

---

Definitions:

Variable Costs

Costs that vary in proportion to the level of production or business activity.

Fixed Costs

Expenses that do not change with the amount of goods or services produced over a short period.

Variable Costs

Costs that vary directly with the level of production or service provision.

Fixed Costs

Expenses that do not change with the level of goods or services produced over a short time.