According to accounting standard-14 purchase consideration is payable to which one of the following?

[amp_mcq option1=”Shareholder and debenture holder” option2=”Debenture holder and creditor” option3=”Shareholder and creditor” option4=”Shareholder” correct=”option4″]

The correct answer is D. Shareholder.

Purchase consideration is the amount paid by the acquirer to the seller for the acquisition of an asset or a business. In the case of a share acquisition, the purchase consideration is payable to the shareholders of the target company.

The other options are incorrect because:

  • Option A is incorrect because debenture holders are not the owners of the company. They are creditors of the company and are entitled to receive interest payments on their debentures.
  • Option B is incorrect because creditors are not the owners of the company. They are creditors of the company and are entitled to receive repayment of their loans.
  • Option C is incorrect because shareholders and creditors are both entitled to receive payment from the acquirer, but the purchase consideration is payable to the shareholders.
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