Where an Acquisition in an Associate Results in an Excess

question 15

Multiple Choice

Where an acquisition in an associate results in an excess the excess is accounted for in the year of acquisition as follows:

• A) as a credit against the investment in associate account.
• B) as a credit against the share of associate profit account.
• C) as a debit against the share of associates retained earnings
• D) no adjustment is required due to the single line method of accounting followed under the equity method.

Understand the various categories of quality costs: prevention, appraisal, internal failure, and external failure.

Identify specific examples of prevention costs in quality management.

Identify specific examples of appraisal costs in quality management.

Identify specific examples of internal failure costs in quality management.

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Definitions:

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