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 not assumed by the acquiring firm. The other options listed (current liabilities, long-term debt, warranty claims, and off-balance sheet liabilities) are all liabilities and would be assumed by the acquiring firm in a merger.

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