Goodwill means the good name or wide business connections or reputations earned by a businessman through his hard work and honesty. This helps the business to earn more profit.
A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The firms that agree to merger are roughly equal in terms of size, customer, scale of operations, etc. for this reason, the term ‘’ merger of equal’’ is sometimes used.
When the business transactions are recorded in the books of accounts there remains a possibility of accounting errors. It may be because of hastiness in writing, negligence, oversight or incomplete knowledge of the principles of accountancy.
Accounting principles = concepts + accounting conventions commonly known as GAAP (Generally accepted accounting principles) based on which financial statements are to be prepared. Accounting principles are divided into two parts, concepts, and conventions.