When an acquiree liquidates, the accounts of the acquiree are transferred to which two accounts?
A) Share capital and retained earnings
B) Liquidation and shareholders' distribution
C) Cash at bank and liquidation
D) Shareholders' distribution and retained earnings

Question

Quizplus · Accepted Answer

When an acquiree liquidates, the accounts of the acquiree are transferred to two accounts: Liquidation account and shareholders' distribution account. The liquidation account is used to record the proceeds from the sale of assets, while the shareholders' distribution account is used to record the distribution of the proceeds to the shareholders. This distribution may include the return of capital and any remaining profits. Therefore, option B is the correct answer.

When an Acquiree Liquidates, the Accounts of the Acquiree Are