Match List I with List II List I List II A. Excess of purchase consid…

Match List I with List II

List I	List II
A. Excess of purchase consideration over value of net assets	I. Issue debentures as collateral security
B. Excess of net assets over purchase consideration	II. Goodwill
C. Debenture suspense Account	III. Issue of debentures for consideration other than cash
D. Assets received against debentures	IV. Capital reserve

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → A-II, B-IV, C-I, D-III

A. Excess of purchase consideration over value of net assets — this matches II. Goodwill. Paying more than the net assets are worth means paying for goodwill, which is debited.

B. Excess of net assets over purchase consideration — this matches IV. Capital reserve. Getting net assets for less than their value is a capital profit, credited to capital reserve.

C. Debenture suspense Account — this matches I. Issue debentures as collateral security. When debentures issued as collateral security are recorded in the books, Debenture Suspense Account is debited and the Debentures Account credited.

D. Assets received against debentures — this matches III. Issue of debentures for consideration other than cash. Debentures issued to a vendor in payment for assets are issued for consideration other than cash.

NCERT (2026-27 edition):
Issue of Debentures for Consideration other than Cash – “… In case of the whole business being taken over if the amount of debentures issued is more than the amount of the net assets taken over, the difference (excess) will be treated as value of goodwill and the same shall also be debited while passing the journal entry for the purchase of vender’s business (see Illustration 11). But if it is the other way round, i.e., the value of debentures is less than the value of the net assets taken over the difference will be credited to capital Reserve accounts (See Illustration 12).”

NCERT (2026-27 edition):
Issue of Debentures as a Collateral Security

Extract from the NCERT textbook

NCERT (2026-27 edition):
Issue of Debentures for Consideration other than Cash – “Sometimes a company purchased assets from vendors and instead of making payment in cash issues debentures for consideration thereof. Such issue of debentures is called debentures issued for consideration other than cash.”