WAEC Accounting 2020 Objective — Question 49

Question 49 of 50 from the West African Examinations Council (WAEC) Accounting 2020 Objective paper, with the correct answer and a full explanation.

The excess of net assets acquired over purchase consideration is

A. capital reserveCorrect
B. goodwill
C. purchase price
D. discount

Explanation

The excess of net assets over purchase consideration is regarded as capital reserve, discount granted to the buyer. (Where consideration exceeds net assets, the excess is goodwill.)

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