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What is the difference between amalgamation, absorption,
liquidation ? Why realisation account is being prepared ?
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When two or more entity are merged togather and form new
distinct entity is called amalgamation.
When one entity absorbed one or more emtity and later
entity loss their entity merged with former entity is
called absorption.
When a company lossed their entity by action of law or
action taken by self is called liquidation.
Realisation account is prepared to control assets and
liabilities of entity
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