Question

20. Dissolution expenses paid by
purchasing company are debited
to --- Account in purchase
method.
O purchase
O Gross amount
O Goodwill
O Shareholder's​

Answer 1

Answer:

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Answer 2

Dissolution expenses paid by purchasing companies are debited to goodwill (option c).

• In accounting, the Purchase Method is a method of inventory costing in which a corporation buys items and services for cash. It is a standard accounting method for accounting for the purchase of inventory, or stock on hand.
• Goodwill is an intangible asset connected with the acquisition of a business by another. Goodwill is defined as the portion of the purchase price that is greater than the total of the net fair value of all assets acquired and liabilities assumed in the transaction.
• If the acquiring firm is obligated to pay the vendor's liquidation fees, the money should be deducted from the goodwill or capital reserve account, depending on the situation.