To Ensure a Smooth Transition When Buying an Existing Business

question 32

Multiple Choice

To ensure a smooth transition when buying an existing business, a buyer should ________.

• A) communicate with employees to reduce their uncertainty and anxiety
• B) be honest with existing employees about upcoming changes and plans for the company's future
• C) consider asking the seller to stay on and serve as a consultant until the transition is complete
• D) All of the above

---

Definitions:

Partial Equity Method

An accounting technique used for investments, where an investor recognizes income from the investee to the extent of dividends received and adjustments for changes in the investee's net assets.

Dividends

Disbursements from a corporation to its shareholders, typically deriving from the company's profits.

Amortization

The gradual reduction of a debt or the cost of an intangible asset over a specific period of time through regular payments.