Question : Assertion (A): Purchased goodwill means goodwill for which a consideration has been paid.
Reason (R): It is shown in Balance Sheet as a liability.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion
Option 3: Assertion (A) is true but Reason (R) is false
Option 4: Assertion (A) is false but Reason (R) is true
Answer (1)
23rd Jan, 2024
Correct Answer: Assertion (A) is true but Reason (R) is false
Solution : Purchased goodwill means goodwill for which a consideration has been paid. It is shown in Balance Sheet as an asset. Hence, the correct option is 3.
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