Organizing in Management: Definition and Functions
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Organizing in Management: Definition and Functions

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Questions and Answers

What is the primary reason for businesses to combine?

  • To diversify products
  • To reduce expenses
  • To eliminate competition
  • To gain a competitive advantage (correct)

    • According to PFRS 3, what is the definition of a business combination?

  • Any set of conditions in which organizations are joined through any means
  • A situation where two or more businesses merge without any control being transferred
  • A transaction in which an acquirer gains partial control of a business
  • A transaction in which an acquirer takes over a business (correct)

    • What is the classification of business combination based on the legal point of view?

  • Methods of Combination (correct)
  • Structure of Combination
  • Accounting Method Used
  • None of the above

    • Which type of business combination involves combining companies within the same industry that have been competitors?

    <p>Horizontal Integration</p> Signup and view all the answers

    Why would a company choose vertical integration as a structure of combination?

    <p>To strengthen the supplier-customer relationship</p> Signup and view all the answers

    What does an acquirer obtain in a business combination according to PFRS 3?

    <p>Complete control of one or more businesses</p> Signup and view all the answers

    Which type of business combination involves little to no similarities between the companies involved?

    <p>Conglomerate</p> Signup and view all the answers

    In a statutory merger, what happens to the acquired company as a separate legal entity?

    <p>It ceases to exist</p> Signup and view all the answers

    What method of business combination involves forming a new company to acquire all the net assets of two or more companies?

    <p>Statutory Consolidation</p> Signup and view all the answers

    In stock acquisition, what happens to the acquired company as a separate legal entity?

    <p>It becomes a subsidiary</p> Signup and view all the answers

    Which accounting method is used for all business combinations according to PFRS 3 Revised?

    <p>Purchase Method</p> Signup and view all the answers

    In business combination, what is recognized and measured at fair value?

    <p>Identifiable Assets &amp; Liabilities</p> Signup and view all the answers

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