passwella.
Menu

JAMB Principles of Accounts 2000 Question 41

Question 41

Purchase of Business

A business is acquired at par when the

  1. A.purchase consideration equals goodwill
  2. B.purchase consideration equals net value
  3. C.purchase consideration is greater than the net value
  4. D.net assets is greater than the liabilities.
Show the answer and explanation

Answer: B (purchase consideration equals net value)

Explanation

At par means the price paid equals the net value of the assets taken over, so there is no goodwill.