Question :
When Net Assets are more than Purchase Consideration. the excess of Net Assets over Purchase Consideration is credited to-----------------
Option 1: Goodwill account
Option 2: Capital reserve account
Option 3: Profit and loss account
Option 4: Vendor account
Correct Answer: Capital reserve account
Solution : Answer = Capital reserve account
When the net assets of a company exceed the purchase consideration paid during an acquisition, the excess amount is credited to the capital reserve account. This represents the surplus value gained by the acquiring company beyond the fair value of the acquired company's net assets, often reflecting intangible benefits or synergies.
Hence, the correct option is 2.
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