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When A Business Is Purchased From A Sole Trader, The Excess Of The Purchase Price Over The Net Assets Is? - Erudites Academy

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

by | Mar 21 | Accounting WAEC | 0 comments

A. reserve
B. goodwill
C. freehold
D. valuation price

Correct Answer: Option B

B. goodwill

Explanation

Goodwill is recorded when a company acquires (purchases) another company and the purchase price is greater than the fair value of the identifiable tangible and intangible assets therein.

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