If the purchase price exceeds the net assets of a company, the excess amount is…

Accounts - Principles of Accounts JAMB 2018

If the purchase price exceeds the net assets of a company, the excess amount is debited to________________

  • Cash account
  • purchase account
  • goodwill account checkmark
  • sales account

The correct answer is: C

Explanation

Goodwill is the excess of purchase consideration over the total value of the business

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