BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
____ is the blending together two or more existing companies into one
A
combination
B
amalgamation
C
purchase of business
D
blending
Explanation: 

Detailed explanation-1: -Amalgamation is the combination of two or more companies into a brand new entity by combining the assets and liabilities of both entities into one. This differs from a traditional merger in that neither of the two companies involved survives as an entity.

Detailed explanation-2: -What Is a Merger? A merger is an agreement that unites two existing companies into one new company. There are several types of mergers and also several reasons why companies complete mergers. Mergers and acquisitions (M&A) are commonly done to expand a company’s reach, expand into new segments, or gain market share.

Detailed explanation-3: -There are two types of amalgamation, including merger and purchase methods. In both cases, the legal entity of the preexisting companies vanishes, replaced by a new company with combined assets and liabilities.

Detailed explanation-4: -Conglomerate. A merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed.

Detailed explanation-5: -Merger: Where assets and liabilities of one company are transferred to another and the first company loses its existence. Amalgamation: Where two or more companies merge into a third new company and the existing company loses its existence.

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