Accounting Multiple Choice Question – 28 August 2021

The Balance Sheet of a sole trader shows net assets of £500,000.

A limited company buys this business for £800,000 by issuing new share capital.

The fair value of the net assets acquired is £700,000.

How much do the net assets of the purchasing company increase?

Select ONE answer:

1. £300,000
2. £500,000
3. £700,000
4. £800,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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