Which of the following is a vertical combination? a. A combination where the two entities are competitor in the same industry b. A combination where the two entities have a potential buyer/seller relationship c. A combination where the two entities are unrelated d. None of the above describes a vertical combination
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Which of the following is a vertical combination?
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- If both big companies enter into a joint venture, will that signify unfair competition? Explain briefly.Which of the following conditions would not indicate that two business segments should be classified as a single operating segment? They have similar amounts of intersegment revenues or expenses. They have a similar distribution of products. They have similar production processes. They have similar products or services. Other:________________________________. It is a type of business combination wherein an investor, having an existing involvement in the investee, acquires additional investment in order to obtain control over the investee. a. Business combination achieved by contract alone b. Business combination achieved by mere exchanges of equity interests c. Business combination achieved in stages d. Baby step combination
- A horizontal merger takes place between companies operating:a. At different stages of the production processb. In the same area of businessc. In unrelated lines of businessd. All of the abovee. None of the aboveWhat is the definition of an alliance? A business relationship between a KPMG firm and a third party where the KPMG firm contracts with the third party to deliver specific services to a specific client. A business relationship between a KPMG firm and an individual, whether directly or through an agency or other entity, where the individual assists the firm in providing services to the firm’s clients. A business relationship where a third party provides goods or services to a KPMG firm in support of the delivery of client engagements. A business relationship formed between a KPMG firm and a third party where both parties intend to cooperate for multiple engagements, transactions or events in order to achieve a common interest or goal.Which of the following statements best describes the difference between a merger and joint venture? a. None of these statements provided differences the two. b. In a merger , two firms combine financial resoures to establish a new firm c. in a joint venture the bidding firm takes control o fthe control of the joint project. d. In a joint venture , firms agree to cooperate in pursuit of joint goal
- Multiple Choice Questions Which of the following statements is correct? All joint arrangements which are not structured through a separate vehicle are classified as joint ventures. For a joint venture, the rights pertain to the rights and obligations associated with individual assets and liabilities, whereas with a joint operation, the rights and obligations pertain to the net assets. Where the joint operators have designed the joint arrangement so that its activities primarily aim to provide the parties with an output it will be classified as a joint venture. In considering the legal form of the separate vehicle if the legal form establishes rights to individual assets and obligations, the arrangement is a joint operation. If the legal form establishes rights to the net assets of the arrangement, then the arrangement is a joint venture. A 50:50 joint operation was commenced between two participants. Mary Company contributed cash of $90 000, and Strickland Company contributed…Intra-entity transfers between the component companies of a business combination are quite common. Why do these intra-entity transactions occur so frequently?Which of the following statements about joint arrangements is/are incorrect: (i) Whenever a joint arrangement is structured through a vehicle that is separate from the parties, the arrangement is classified as a joint venture (ii) Whenever the contractual arrangements give the parties rights to the assets and obligations for the liabilities of the arrangement, the arrangement is classified as a joint operation (iii) Joint operations are reported in the consolidated statement of financial position of the joint operator by recognising the share of assets and liabilities attributable to the joint operator (iv) Joint ventures are reported in the consolidated statement of financial position of the joint venturer using the equity method of accounting a. (i) only b. (ii) only c. (iii) only d. (iv) only e. (i) and (ii)
- The combination of resources through a partnership arrangement rather than through a legal combination of the acquiring and target firm is known as a ? a Leveraged Buyout b Joint Venture c Hostile Takeover d Vertical Merger e None of the aboveHow important is intercompany activity on decisions to form business combinations? We see intercompany transfers quite often between companies involved in a business combination. Why do you feel that this happens so frequently? Is this ever a concern to the investors, controlling and noncontrolling?An entity shall determine whether a transaction or other event is a business combination by applying the definition in PFRS 3, which requires that: a. All of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination. b. All of the combining entities transfer their net assets, or the owners of those entities transfer their equity interests, to a newly formed entity. c. The assets acquired and the liabilities assumed constitute a business. d. All of the above.