McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) , Bachelor of Commerce (B Com) .
Chapters
| 51. |
The Amalgamation Adjustment Account appears in the books, it is shown under the heading of ......... in the balance sheet. |
| A. | Reserve and Surplus |
| B. | Fixed Assets |
| C. | Investments |
| D. | Miscellaneous expenditure |
| Answer» D. Miscellaneous expenditure | |
| 52. |
If amalgamation is in the ..............., the General Reserve or Profit and Loss A/c balance will not be shown in the balance sheet. |
| A. | Form of Merger |
| B. | Form of purchase |
| C. | Net assets method |
| D. | Consideration method |
| Answer» B. Form of purchase | |
| 53. |
If the intrinsic values of shares exchanged are not equal, the difference is paid in ........... |
| A. | Cash |
| B. | Debenture |
| C. | Pref. share |
| D. | Assets |
| Answer» A. Cash | |
| 54. |
In case of .............., one existing company takes over the business of another company and no new company is formed. |
| A. | Amalgamation |
| B. | Absorption |
| C. | Reconstruction |
| D. | None of the Above |
| Answer» B. Absorption | |
| 55. |
In amalgamation of two companies |
| A. | Both companies lose their existence |
| B. | Both companies continue |
| C. | Any one company continues |
| D. | none |
| Answer» A. Both companies lose their existence | |
| 56. |
When purchasing company pays purchase consideration, it will be debited to |
| A. | Business purchase account |
| B. | Assets account |
| C. | Liquidator of selling company’s account |
| D. | none |
| Answer» C. Liquidator of selling company’s account | |
| 57. |
When the purchasing company bears the liquidation expenses, it will debit the expenses to |
| A. | Vendor Company’s Account |
| B. | Bank Account |
| C. | Goodwill Account |
| D. | none |
| Answer» C. Goodwill Account | |
| 58. |
When the Vendor (seller) company agrees to bear liquidation expenses, it will debit |
| A. | Realisation Account |
| B. | Bank Account |
| C. | Goodwill Account |
| D. | none |
| Answer» A. Realisation Account | |
| 59. |
When the purchasing company does not take over a particular liability and the vendor company pays that liability, it will debit it to |
| A. | Realisation Account |
| B. | Bank Account |
| C. | Liability Account |
| D. | none |
| Answer» A. Realisation Account | |
| 60. |
When the Net Assets are less than the Purchase Consideration, the difference will be |
| A. | Debited to Goodwill A/c. |
| B. | Debited to General Reserve |
| C. | none of these |
| D. | none |
| Answer» A. Debited to Goodwill A/c. | |
| 61. |
While calculating purchase consideration ............... values of assets is to be considered. |
| A. | Book value |
| B. | Revalued price |
| C. | Average price |
| D. | Capital |
| Answer» B. Revalued price | |
| 62. |
Net Assets minus Capital Reserve is _________ |
| A. | Goodwill |
| B. | Total assets |
| C. | Purchase consideration |
| D. | None of these |
| Answer» C. Purchase consideration | |
| 63. |
Hitesh Ltd.’s purchase consideration is Rs.12,345 and Net Assets Rs.3,568, then.......... |
| A. | Goodwill Rs. 8,777 |
| B. | Capital Reserve Rs. 8,777 |
| C. | Goodwill Rs. 15,913 |
| D. | Capital Reserve Rs. 15,913 |
| Answer» A. Goodwill Rs. 8,777 | |
| 64. |
The original amount of preference share capital should be transferred to ............ account in the time of amalgamation in the books of vendor co. |
| A. | Preference shareholders Account |
| B. | Capital Reserve Account |
| C. | Equity share capital Account |
| D. | Equity share capital Account |
| Answer» A. Preference shareholders Account | |
| 65. |
The share capital, to the extent already held by the purchasing company, is closed by the vendor company by crediting it to: |
| A. | Share capital account |
| B. | Purchasing company's account |
| C. | Realisation account. |
| D. | none |
| Answer» C. Realisation account. | |
| 66. |
In case of inter-company holdings, the purchasing company, at the time of payment of the purchase consideration, surrenders the shares in the vendor company by crediting: |
| A. | Vendor company's account |
| B. | Shares in the vendor company account |
| C. | Share capital account. |
| D. | none |
| Answer» B. Shares in the vendor company account | |
| 67. |
The vendor company transfers preliminary expenses (at the time of absorption) to: |
| A. | Equity shareholders' account |
| B. | Realisation account |
| C. | Purchasing company's account. |
| D. | none |
| Answer» B. Realisation account | |
| 68. |
A Ltd. and B Ltd. go into liquidation and a new company X Ltd. is formed. It is a case of: |
| A. | Absorption |
| B. | External reconstruction |
| C. | Amalgamation. |
| D. | none |
| Answer» C. Amalgamation. | |
| 69. |
For amalgamation in the nature of merger, the shareholders holding at least ______ or more of the equity shares of the transferor company becomes the equity shareholders of the transferee company. |
| A. | 51% |
| B. | 90% |
| C. | 99% |
| D. | 100% |
| Answer» B. 90% | |
| 70. |
As per AS–14 purchase consideration is what is payable to |
| A. | Shareholders |
| B. | Creditors |
| C. | Debenture holders |
| D. | Shareholders and Debenture holders. |
| Answer» A. Shareholders | |
| 71. |
In the case of ………………………. only one of the combining companies survives and the other losses its separate identity. |
| A. | Acquisition |
| B. | Merger |
| C. | Amalgamation |
| D. | Formation |
| Answer» A. Acquisition | |
| 72. |
……………….is the amount payable by the purchasing companies to the vendor company for taking over the business of vendor company. |
| A. | Goodwill |
| B. | Total assets |
| C. | Purchase consideration |
| D. | None of these |
| Answer» C. Purchase consideration | |
| 73. |
In absorption there is one ……………………and no formation. |
| A. | Merger |
| B. | Liquidation. |
| C. | Demerger |
| D. | Formation |
| Answer» B. Liquidation. | |
| 74. |
In external liquidations, there is one liquidation and one ……………… |
| A. | Formation |
| B. | Merger |
| C. | Demerger |
| D. | Purchase consideration |
| Answer» A. Formation | |
| 75. |
When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as .................. |
| A. | Amalgamation |
| B. | Absorption |
| C. | Internal reconstruction |
| D. | External reconstruction |
| Answer» A. Amalgamation | |
| 76. |
When one of the existing companies take over business of another company or companies, it is known as ........... |
| A. | Amalgamation |
| B. | Absorption |
| C. | Internal reconstruction |
| D. | External reconstruction |
| Answer» B. Absorption | |
| 77. |
Which of the following statement is correct? |
| A. | The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only |
| B. | The amount of Goodwill or Capital Reserve is found out in the books of vendor company only. |
| C. | Goodwill = Net Assets – Purchase price ( |
| D. | The face value of shares of purchasing company will be taken in to account while calculating purchase consideration. |
| Answer» A. The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only | |
| 78. |
The form of balance sheet is……………….. |
| A. | Vertical |
| B. | Horizontal |
| C. | Horizontal and vertical |
| D. | None of the above |
| Answer» C. Horizontal and vertical | |
| 79. |
The term current asset doesn’t cover |
| A. | Car |
| B. | Debtors |
| C. | Stock |
| D. | Prepaid expenses |
| Answer» A. Car | |
| 80. |
P&L statement is also known as |
| A. | Statement of operations |
| B. | Statement of income |
| C. | Statement of earnings |
| D. | All of the above |
| Answer» B. Statement of income | |
| 81. |
Which of the following is true about financial statements? I)Financial statement gives a summary of accounts. II) Financial statements can be stated as recorded facts. |
| A. | Only I |
| B. | Only II |
| C. | Both I andII |
| D. | None of the above |
| Answer» C. Both I andII | |
| 82. |
The statement of financial position and the balance sheet are synonyms |
| A. | True |
| B. | False |
| C. | none |
| D. | none |
| Answer» A. True | |
| 83. |
Which of the following statements are true? I) Financial statements are only interim report. II) Financial statements are also known as annual records. III) Financial statements are historic. |
| A. | Both I and II |
| B. | Both I and III |
| C. | Both II and III |
| D. | I, II, III |
| Answer» C. Both II and III | |
| 84. |
Certain assumptions are essential to prepare financial statements. |
| A. | True |
| B. | False |
| C. | none |
| D. | none |
| Answer» A. True | |
| 85. |
Premium received on issue of shares cannot be utilised for ---------. |
| A. | for the issue of bonus shares . |
| B. | for writing of preliminary expenses |
| C. | for providing premium payable on redemption |
| D. | for distribution of dividend. |
| Answer» D. for distribution of dividend. | |
| 86. |
In case of public limited company, after getting the-----------the company can start the business |
| A. | Memorandum of Association |
| B. | Table A |
| C. | Certificate of commencement of business |
| D. | Articles of Association |
| Answer» C. Certificate of commencement of business | |
| 87. |
Trade Payables are recorded in…………………. |
| A. | Current Liabilities |
| B. | Current Assets |
| C. | Equity |
| D. | Inventories |
| Answer» A. Current Liabilities | |
| 88. |
In company Final Accounts Goodwill is shown under…………… |
| A. | Current Liabilities |
| B. | Current Assets |
| C. | Fixed Assets |
| D. | Inventories |
| Answer» C. Fixed Assets | |
| 89. |
Dividend is payable on the amount of………………………….. |
| A. | Profit |
| B. | Reserves |
| C. | Loss |
| D. | Income |
| Answer» A. Profit | |
| 90. |
The dividend paid between two annual general meeting is known a………………………. |
| A. | Final dividend |
| B. | Ex Dividend |
| C. | Interim Dividend |
| D. | Dividend |
| Answer» C. Interim Dividend | |
| 91. |
Unclaimed dividend recorded on the…………………….. the balance sheet. |
| A. | Liability |
| B. | Assets |
| C. | Credit |
| D. | Debit |
| Answer» A. Liability | |
| 92. |
A liability which can be measured only by using a substantial degree of estimation is called………………………. |
| A. | Contingent liabilities |
| B. | Contingent Assets |
| C. | Fixed Assets |
| D. | Non Current Liabilities |
| Answer» A. Contingent liabilities | |
| 93. |
Unquoted shares means………………………. |
| A. | Listed Shares |
| B. | Quoted Shares |
| C. | Unquoted Shares |
| D. | Unlisted Shares |
| Answer» D. Unlisted Shares | |
| 94. |
Bills receivable is ……………………..assets. |
| A. | Current |
| B. | Non - current |
| C. | Fixed Assets |
| D. | Investment |
| Answer» A. Current | |
| 95. |
The amount of profit kept a side to maintain uniform rate of dividend is called……………… |
| A. | Ex Dividend |
| B. | Final Dividend |
| C. | Undistributed Dividend |
| D. | Dividend |
| Answer» C. Undistributed Dividend | |
| 96. |
Director’s remuneration shall not exceed ………………. % of the net profits. |
| A. | 10% |
| B. | 20% |
| C. | 15% |
| D. | 13.333% |
| Answer» A. 10% | |
| 97. |
Voluntary winding up: |
| A. | If period fixed for the company is expired. |
| B. | If company passes a special resolution the company wound up voluntarily. |
| C. | Members voluntary winding up is applicable to solvent companies only. |
| D. | All of the above |
| Answer» D. All of the above | |
| 98. |
Compulsory winding up: |
| A. | If a company unable to pay its debt |
| B. | If the number of members of company reduced below statutory limit. |
| C. | If a company does commence its business within a year from its incorporation. |
| D. | All of the above. |
| Answer» D. All of the above. | |
| 99. |
The first item in order of payment to be made by liquidator is: |
| A. | Secured creditors |
| B. | Preferential creditors |
| C. | Liquidation expenses |
| D. | Preferential creditors |
| Answer» C. Liquidation expenses | |
| 100. |
Liquidator’s statement of receipts and payment is know as: |
| A. | Cash flow statement |
| B. | Cash book |
| C. | Liquidator’s final statement of account |
| D. | Deficiency accounts. |
| Answer» C. Liquidator’s final statement of account | |
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