Excess value of net assets over purchase consideration at the time of purchase of business is credited to:
- AGeneral reserve
- BCapital reserve
- CVendors' account
- DDebenture redemption reserve
Solution & Step-by-step Explanation
When a business takes over another firm and the net worth of assets acquired () is greater than the purchase price (Purchase Consideration) paid to the vendor, this results in a capital profit for the purchasing firm. This accounting surplus is credited to the Capital Reserve Account.