In a merger, the acquiring firm assumes all liabilities of the target firm. Assumed liabilities include all but which of the following?
A) Current liabilities
B) Long-term debt
C) Warranty claims
D) Fully depreciated operating equipment
E) Off-balance sheet liabilities

Question

Quizplus · Accepted Answer

Fully depreciated operating equipment is not a liability and therefore is not assumed by the acquiring firm in a merger. The other options listed are all liabilities that would be assumed by the acquiring firm.

In a Merger, the Acquiring Firm Assumes All Liabilities of the Target