Brite Cosmetics Corporation purchases all of the assets of Color-All Lipsticks Corporation. With respect to Brite Cosmetics' liabilities, Color-All Lipsticks is

Question

Quizplus · Accepted Answer

In a purchase of assets, the acquiring company (Brite Cosmetics in this case) is not automatically responsible for the liabilities of the selling company (Color-All Lipsticks). However, if the sale is actually a merger or consolidation, then Brite Cosmetics would be responsible for Color-All Lipsticks' liabilities. Therefore, D is the best choice.

Brite Cosmetics Corporation Purchases All of the Assets of Color-All