CPA Questions & Simulations | Basic Consolidation

In this video, I cover CPA questions and simulations. CPA simulations are a form of testing on the CPA exam. CPA questions can take form of simulations which represent a substantial part of the CPA exam. Farhat Accounting Lectures can help prepare you to answer CPA questions. https://farhatlectures.com/

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The term business consolidation refers to the combination of several business units or different companies into a single, larger organization. Business consolidation is used to improve operational efficiency by reducing redundant personnel and processes. Business consolidation can result in long-term cost savings and a concentration of market share, but in the short-term can be expensive and complex.

Consolidation happens when two or more companies merge to become one. Also known as amalgamation, business consolidation is most often associated with mergers and acquisitions (M&A). This often happens when several similar, smaller businesses combine to form a new, larger legal entity. In most cases, the smaller entities that are acquired cease to exist. Other kinds of consolidation are explained further on.


Combining multiple companies or business units into a brand new company is the most drastic option. This can be an expensive proposition if one of the merging companies is liquidated, and can carry additional costs associated with creating a new brand. But businesses that want to consolidate their operations have other options at their disposal. Another option for business consolidation involves moving smaller operations into an existing company that does not intend to be dismantled.