📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!
  • google app store apple app store
    • ✖

      Question

      State which statement is

      correct:
      A In case of merger – All reserves and surplus of vendor company are taken over by purchasing company. Correct Answer Incorrect Answer
      B In case of purchase – None of the reserves and surplus of vendor company are taken over by purchasing company. Correct Answer Incorrect Answer
      C Both (a) and (b) are correct. Correct Answer Incorrect Answer
      D Only (a) is correct. Correct Answer Incorrect Answer

      Solution

      Under AS 14, in case of merger (pooling of interests), all assets, liabilities, and reserves of the transferor company are recorded at book values. In case of purchase, only assets and liabilities agreed upon are recorded, and reserves are not carried over.

      Practice Next
      More Accounts Questions

      Relevant for Exams:

      ask-question