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WAEC Financial Accounting 1997 Question 32

Question 32

Purchase of Business

The amount for which a business is sold is known as

  1. A.goodwill
  2. B.capital reserve
  3. C.purchase consideration
  4. D.premium
  5. E.equity.
Show the answer and explanation

Answer: C (purchase consideration)

Explanation

The agreed price paid for a business is the purchase consideration.