Inventory Was Acquired as Part of a Business Combination at the End

question 3

Multiple Choice

Inventory was acquired as part of a business combination at the end of 2012. The inventory was sold in 2013. How should the fair value adjustment for the inventory at acquisition be treated for consolidation at the end of 2013?

• A)It should be added to sales.
• B)It should be added to the cost of goods sold.
• C)It should be added to retained earnings.
• D)It should be added to inventory.

---

Definitions:

Disruption

An interruption or disturbance that challenges the normal course or functioning of something, often leading to innovative solutions or changes.

Cluster

A group of similar things or people positioned or occurring closely together.

Avoidant

A personality trait or behavioral pattern characterized by the desire to avoid certain situations, tasks, or interpersonal interactions due to fear, anxiety, or discomfort.

Obsessive-Compulsive

Relating to a psychological disorder characterized by unwanted repetitive thoughts (obsessions) and actions (compulsions).