Question

Purchase Consideration of a business + Capital Reserve =

a) Net Assets of the business b) Goodwill

c) Consideration d) Total Assets of the Business
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Answer 1

$\underline\mathtt \orange{Answer}$

The amount of purchase consideration is usually equal to the value of net amount (i.e., Total Assets minus Current Liabilities). If more amount is paid, the difference is treated as Goodwill and if less amount is paid than the net assets, the difference is treated as Capital Reserve.

Answer 2

Answer:

total assets of the business