Corporate Accounting

The vendor company transfers preliminary expenses (at the time of absorption) to:

• Equity shareholders' account

• Realisation account

• Purchasing company's account

• Goodwill account.

When the expenses of liquidation are to be borne by the purchasing company, then the purchasing

company debits:

• Vendor company's account

• Bank account

• Goodwill account.

• capital account

When the purchasing company makes payment of the purchase consideration, it debits:

• Business purchase account

• Assets account

• Vendor company's account.

• Reserve

When the expenses of liquidation are to be borne by the vendor company, then the vendor company

debits:

• Realisation account

• Bank account

• Goodwill account.

• Revaluation account

Liabilities (not accumulated profits) of a company include—

• General reserve

• Pension fund

• Dividend equalisation fund.

• Workmen’s compensation fund