Financial Accounting

_____ is the excess of the purchase consideration over the net value of assets

• cash

• goodwill

• purchase consideration

• capital reserve

On settlement of the vendors account, the correct accounting entries are debit vendor account and credit

• bank account

• purchase consideration account

• capital reserve account

• goodwill account

The system of acquiring a business as a going concern by another business is (a) business consideration (b) goodwill (c) redemption reserve (d) purchase of business.

• business consideration

• goodwill

• redemption reserve

• purchase of business

The person or firm that sells its business to another firm or company is referred to as

• goodwill

• capital reserve

• vendor

• purchase consideration

The firm that acquires a business and sell it to another company for profit is

• seller

• corporate company

• promoter

• a vendor

The following are objectives of amalgamation EXCEPT

• to reap economies of scale

• to eliminate competition

• to build up goodwill

• to compete with government

_____ is the blending together two or more existing companies into one

• combination

• amalgamation

• purchase of business

• blending

All are advantages of amalgamation EXCEPT

• amalgamation eliminates the cut-throat competition in the industry

• monopoly in market can be attained

• unemployment may occur

• people may not work in harmony, thereby resulting in signs of discontentment

A ______ is an artificial person which is recognized in law as a separate legal entity

• partner

• lawyer

• company

• corporation

The document that contains the regulation which governs the internal management of the company’s affairs is

• memorandum of association

• prospectus

• articles of association

• certificate of incorporation