McqMate
Chapters
| 1. |
At the time of …………………, inter company debts and acceptances are to be cancelled out. |
| A. | Merger |
| B. | Absorption. |
| C. | Internal reconstruction. |
| D. | Consolidation. |
| Answer» D. Consolidation. | |
| 2. |
Inter- company dividends are ……………………..to the cost of investment in the subsidiary company for calculating goodwill or capital reserve. |
| A. | Added |
| B. | Deducted |
| C. | Remove |
| D. | None of the above. |
| Answer» B. Deducted | |
| 3. |
Holdings of minority will …………………by the number of bonus shares received by them. |
| A. | Increase |
| B. | Decrease |
| C. | Remain same |
| D. | None of the above |
| Answer» A. Increase | |
| 4. |
Out of the unrealized profits, a holding company’s share is reduced from the stock and |
| A. | Profit & Loss A/C |
| B. | Goodwill. |
| C. | Minority Interest |
| D. | Capital A/C |
| Answer» A. Profit & Loss A/C | |
| 5. |
Investments made by a holding company in a subsidiary company are always to be shown in ………………. |
| A. | Profit & Loss A/C |
| B. | Consolidated Balance Sheet. |
| C. | Minority Interest. |
| D. | Dividend A/C |
| Answer» B. Consolidated Balance Sheet. | |
| 6. |
If AB Ltd buys more than 50% of the shares in CD Ltd then which of the following statements accurately summarizes the relationship between these two firms? |
| A. | AB Ltd is a subsidiary undertaking of CD Ltd |
| B. | CD Ltd is the parent undertaking |
| C. | AB Ltd is the parent undertaking |
| D. | There is no significant financial relationship between the two |
| Answer» C. AB Ltd is the parent undertaking | |
| 7. |
On a consolidated balance sheet, if the shares of a company have been bought for more than the balance sheet value then the difference would appear as: |
| A. | Goodwill |
| B. | Capital reserve |
| C. | Loss on purchase |
| D. | Profit on purchase |
| Answer» A. Goodwill | |
| 8. |
Pre-acquisition profit in subsidiary company is considered as: |
| A. | Revenue Profit |
| B. | Capital Profit |
| C. | Goodwill |
| D. | None of the above |
| Answer» B. Capital Profit | |
| 9. |
Profit earned after acquisition of share is treated as: |
| A. | Revenue Profit |
| B. | Capital Profit |
| C. | Goodwill |
| D. | None of the above. |
| Answer» A. Revenue Profit | |
| 10. |
Profit earned before acquisition of share is treated as: |
| A. | Revenue Profit |
| B. | Capital Profit |
| C. | Goodwill |
| D. | Revaluation Profit |
| Answer» B. Capital Profit | |
| 11. |
Preparation of consolidated statements as per AS 21 is : |
| A. | Optional |
| B. | Mandatory for All |
| C. | Mandatory for listed companies. |
| D. | Mandatory for PVT. companies. |
| Answer» C. Mandatory for listed companies. | |
| 12. |
Face value of debentures of subsidiary company, held by holding co.is deducted from: |
| A. | Debentures |
| B. | Cost of Control |
| C. | Minority Interest. |
| D. | Goodwill. |
| Answer» B. Cost of Control | |
| 13. |
Minority Interest includes: |
| A. | Share in share capital |
| B. | Share in capital profit |
| C. | Share in revenue profit |
| D. | All of the above. |
| Answer» D. All of the above. | |
| 14. |
Preparation of Holding Companies Accounts Deals with : |
| A. | AS-22 |
| B. | AS-21 |
| C. | AS-25 |
| D. | AS-12 |
| Answer» B. AS-21 | |
| 15. |
The time interval between the date of acquisition if shares in subsidiary company and date of balance sheet of holding company is known as : |
| A. | Pre-acquisition period |
| B. | Post -acquisition period. |
| C. | Pre- commencement peri |
| Answer» B. Post -acquisition period. | |
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