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What does consolidation refer to in the context of financial accounting?
What does consolidation refer to in the context of financial accounting?
- Legally combining two or more organizations into a single new one
- Blending together of two or more undertakings into one undertaking
- Aggregation of financial statements of a group company as consolidated financial statements (correct)
- Treatment of a group of companies and other entities as one entity for tax purposes
What is the economic motivation for consolidation in business?
What is the economic motivation for consolidation in business?
- Access to new technologies/techniques
- Seeking for hidden or nonperforming assets belonging to a target company (e.g. real estate)
- Bigger companies tend to have superior bargaining power over their suppliers and clients (correct)
- All of the above
What happens to the original organizations upon consolidation in business?
What happens to the original organizations upon consolidation in business?
- They become subsidiaries of a larger company
- They continue to operate independently
- They are legally combined into a single new entity (correct)
- They merge to form a loose association
How is amalgamation defined under the Halsbury's Laws of England?
How is amalgamation defined under the Halsbury's Laws of England?
Consolidation in business involves the creation of multiple new entities.
Consolidation in business involves the creation of multiple new entities.
What does the taxation term of consolidation refer to?
What does the taxation term of consolidation refer to?
Consolidation in the context of financial accounting refers to the aggregation of financial statements of a group company.
Consolidation in the context of financial accounting refers to the aggregation of financial statements of a group company.
Amalgamation under the Halsbury's Laws of England can only occur through the transfer of two or more undertakings to a new company.
Amalgamation under the Halsbury's Laws of England can only occur through the transfer of two or more undertakings to a new company.
Bigger companies tend to have inferior bargaining power over their suppliers and clients.
Bigger companies tend to have inferior bargaining power over their suppliers and clients.
The economic motivation for consolidation in business includes seeking nonperforming assets belonging to a target company.
The economic motivation for consolidation in business includes seeking nonperforming assets belonging to a target company.
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