If a sole proprietorship is purchased for cash, then?

  • A the purchaser debits his business purchase account with the consideration he pays
  • B all assets and liabilities must be bought
  • C goodwill results where value of assets
  • D the vendor debits his business purchase account with the considerstion he receives
jamb 1999accounting

The correct answer is A. the purchaser debits his business purchase account with the consideration he pays

When a sole proprietorship is purchased for cash, the purchaser typically debits their business purchase account with the consideration they pay. 

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