In the Periods After Acquisition, the Gain on Bargain Purchase

question 16

Multiple Choice

In the periods after acquisition, the gain on bargain purchase will be recognised in the pre-acquisition entries as:

• A) no adjustment is necessary.
• B) a credit to gain for the current period.
• C) a debit to retained earnings (closing balance).
• D) a decrease in the amount debited to retained earnings (opening balance).

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Definitions:

Finishing Department

The section of a manufacturing plant where products are completed, undergoing final processes such as painting, polishing, or packaging.

Production Departments

Divisions within a manufacturing company responsible for different stages of the production process, from raw materials to finished products.

Manufacturing Overhead

All indirect costs associated with manufacturing, such as utilities, maintenance, and factory management salaries, not directly tied to production.

Customizing Department

A specialized department within a company focused on modifying and tailoring products to meet specific customer requirements.