If a sole proprietorship is purchased for cash, then?

Accounts - Principles of Accounts JAMB 1999

If a sole proprietorship is purchased for cash, then?

  • the purchaser debits his business purchase account with the consideration he pays checkmark
  • all assets and liabilities must be bought
  • goodwill results where value of assets
  • the vendor debits his business purchase account with the considerstion he receives

The correct answer is: A

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