Choice "B" is correct. The primary purpose of a quasi-reorganization is to eliminate a retained earnings deficit so that future earnings will be available for dividends rather than limited to offsetting the retained earnings deficit. ARB 43 Ch 1A para. 2
Choice "d" is incorrect. A quasi-reorganization is not related to debt relief.
Choice "a" is incorrect. A quasi-reorganization is not related to revaluing understated assets to their fair values.
Choice "c" is incorrect. A quasi-reorganization is not a treasury stock transaction.
