WAEC Accounting 2013 Objective — Question 35

Question 35 of 50 from the West African Examinations Council (WAEC) Accounting 2013 Objective paper, with the correct answer and a full explanation.

When a business is purchased from a sole trader, the excess of the purchase price over the net assets is a

Explanation

When the purchase consideration exceeds the net asset, then there is goodwill while the reverse means a discount.

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