A Purchaser of the Assets of a Business Must Allocate

question 77

Multiple Choice

A purchaser of the assets of a business must allocate the purchase price to the individual assets in accordance with the written agreement between the purchaser and the seller.Which of the following assets would be least preferred for purposes of allocating value from the purchaser point of view?

• A)goodwill
• B)equipment
• C)office building
• D)inventory

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Definitions:

Threat of Violence

The expression of an intention to inflict pain, injury, damage, or other hostile action on someone in an effort to intimidate or coerce.

Innocent Misrepresentation

A false statement made during a contract negotiation that was believed to be true by the person making it, affecting the other party's decision to enter the contract.

Remedy of Rescission

A legal remedy that voids a contract, returning the parties to their positions prior to the agreement, typically used in cases of misrepresentation or fraud.

Statutory Assignment

The transfer of legal rights from one party to another under the terms of a statute.