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Dr.G.R.Damodaran College of Science
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CRISL rated 'A' (TN) for MBA and MIB Programmes

II BCom [AM] [2015-2018]
SEMESTER IV
CORE: CORPORATE ACCOUNTING I -413A
Multiple Choice Questions.

1. Share allotment account is a ------------------.
A. personal account
B. Real account
C. Nominal account
D. Impersonal account
ANSWER: A

2. Share Application account is a---------------.
A. Personal Account
B. Real Account
C. Nominal account
D. Impersonal Account
ANSWER: A

3. The minimum share Application money is -----------.
A. 5% of the face value of shares
B. 10% of the issue price of shares
C. Re. 1 per share
D. 15% of the face value of shares
ANSWER: A

4. Premium received on issue of shares is shown on-----------.
A. asset side of the balance sheet
B. liability side of the balance sheet
C. credit side of the P&L a/c.
D. debit side of the P & L a/c
ANSWER: B

5. Premium on issue of shares can be used for -----------.
A. distribution of dividend
B. writing off capital losses
C. transferring to general reserve
D. paying fees to directors
ANSWER: B

6. Premium received on issue of shares cannot be utilised ---------.
A. for the issue of bonus shares

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B. for writing off preliminary expenses
C. for providing premium payable on redemption
D. for distribution of dividend
ANSWER: D

7. Section -----------of companies act 1956 deals with the scheme of stock invest
A. 69 to 70
B. 69 to 71
C. 69 to 72
D. 69 to 73
ANSWER: D

8. When shares issued at premium which of the following account is credited?
A. Share premium account
B. Share first call account
C. Share allotment account
D. Share forfeited account
ANSWER: A

9. Minimum number of members in case of public company is---------.
A. 4
B. 5
C. 6
D. 7
ANSWER: D

10. Maximum number of members in public limited company is ---------------.
A. 10
B. 20
C. 50
D. unlimited
ANSWER: D

11. After getting minimum subscription of shares, the company has to allot shares with in---------------days.
A. 90
B. 100
C. 110
D. 120
ANSWER: D

12. If the minimum subscription is not received by the company, then the refund of application money
should be made within ----------days.
A. 7
B. 9
C. 10
D. 22
ANSWER: C

13. In case of public limited company, after getting the-----------the company can start the business
A. Memorandum of Association
B. Table A

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5 B. 5 D. reserve capital D. share capital a/c D. Interest on calls in arrears is transferred to -------------. issued capital C.2. authorised capital B. 7 D.php?heading=II BCom [AM] [2015-2018]. liability side D. credit side of P&L a/c C. share premium a/c C.. debit side of p&L a/c. 6 C.. B. S. 4 C. credit side of P&L a/c C. 3 B. debit side of p&L a/c. A. 9 ANSWER: B 19. A. Certificate of commencement of business D. reserve capital D. uncalled capital ANSWER: B 16. share allotment a/c ANSWER: C 17. According to companies Act-----------% of interest is to be paid on calls in arrears. The amount of capital mentioned in MOA is ----------. B. issued capital B. When the shares are issued to purchase the fixed asset. A.20/printqp. asset a/c B. asset side 3 of 22 1/20/2017 11:54 AM . C. http://172. A. A.16. unpaid capital C. The difference between called up capital and paid up capital is --------------. liability side D. A. -------------should be credited. Articles of Association ANSWER: C 14. 6 ANSWER: C 18. asset side ANSWER: B 20. subscribed capital ANSWER: A 15. Interest on calls in advance is transferred to -------------. According to Companies Act-------------% of interest is to be paid on calls in advance. A.

asset side of the balance Sheet B. credit side of the profit and loss account ANSWER: A 23. If a share of Rs. Rs. 10% C. S. ANSWER: C 26. A. issue price of shares ANSWER: B 25. 5% B. 8 has been called and Rs. Rs.. Discount on issue of shares is shown on---------. 5 C. A. profit and loss account ANSWER: C 27. 8 D. 5 has been received is forfeited share capital account in this case will be debited with---------. Rs. 10.2. http://172. Rs. capital reserve D. direct expenses ANSWER: B 24. ANSWER: A 21. The profit on reissue of forfeited shares is transferred to----------------. Liability side of the balance sheet C. 25% of original issue price. Discount of issue of shares is a ---------. called-up capital C. debit side of the profit and loss account D. paid up capital B..10 ANSWER: C 4 of 22 1/20/2017 11:54 AM . 15% ANSWER: B 22. the share capital account is debited by--------------. Discount on issue of forfeited shares should not exceed----------------. general reserve B. 10% of reissued capital C. A. A. revenue loss B. A.php?heading=II BCom [AM] [2015-2018]. capital loss C. on which Rs. 2 B.20/printqp.16. 12% D. When shares are forfeited. The rate of discount on shares cannot exceed------------. calls in arrears D. deferred revenue expenditure D. 5% od subscribed capital B. A. A. capital redemption reserve C. the amount received so far on forfeited shares D.

1/9 B. discount C. issued to the directors of the company D. 1/5 D. Redeemable preference shares can be redeemed out of ------------------. premium B. Preference share holders receive--------------. When shares are issued to promoters for their services. A new company cannot issue shares at --------------..php?heading=II BCom [AM] [2015-2018]. Indian companies cannot issue-------------shares. deferred ANSWER: D 34.. 5 of 22 1/20/2017 11:54 AM . par D. sweat equity D. 28.20/printqp.16. bank account B. discount account ANSWER: C 35. A. goodwill account D. A. fixed rate of interest B. S. A call money on shares should not exceed -------------of the face value of shares. A. 1/4 ANSWER: D 32. A. http://172.-----------is to be debited. debenture holders D. preference C. C. A. equity shareholders B. A.2. preference shareholders C. fixed rate of dividend D. flexible rate of dividend ANSWER: C 31. facevalue ANSWER: B 33. 1/7 C. Rights shares are those shares which are-----------. bond holders ANSWER: A 30. Real owners of a company are called as-------------. equity B. first offered to the existing share holders. issued by a newly formed company B. promoter account C. flexible rate of interest C. A. issued to holders of convertible debentures ANSWER: B 29.

Capital redemption reserve D. A.2. equity shares D. capital B.. current provision ANSWER: B 38. 20 B. http://172. Rs. divisible profits otherwise available for dividend C. 40 ANSWER: B 41. 95. reserve capital D. partly paid shares C. B. 30 D.16. Value of right is ---------------. both B and C ANSWER: D 36. A. amount realized on sale of investments B. Right issue price is Rs. Securities premium account is shown under ------------head. All the above ANSWER: D 39. Rs. P & L a/c B. Section 78 ANSWER: D 40. Which section of the companies Act 1956 provides for the issue and redemption of preference shares? A. Rs. Reserves and surplus C. Market price of the share is Rs. calls in arrears 6 of 22 1/20/2017 11:54 AM . A.. Rs. Section 76 B.20/printqp. Section 77 D. long term loan D. calls in advance C. Section 75 C. fully paid preference shares B. ----------------can be utilized to issue bonus shares. Only --------------shares can be redeemed. The amount on shares not paid by share holders after it has been called by the company is--------------. A. calls in arrears. A. The company intends to issue one right share for every four shares. 120. proceed of fresh issue of shares D. S. 25 C. Subscribed capital ANSWER: B 42. A.php?heading=II BCom [AM] [2015-2018]. General reserve C. A. The amount on shares paid by share holders before it is actually due is-------------------. irredeemable preference shares ANSWER: A 37.

retained by company D. http://172. A. A. amalgamation C. A. Dividend is paid on ------------.php?heading=II BCom [AM] [2015-2018].5% B. subscribed capital ANSWER: A 43. board of directors C. If proposed dividend is 18% of the paid up capital. the percentage of profit transferred to reserve is-----------. all the above ANSWER: C 49. reserve capital D. 7 of 22 1/20/2017 11:54 AM ... creditors ANSWER: B 44.2. face value D. payment of income tax C. When a new company is formed with the same name in order to take over the business of the existing company it is called as-------------. Minimum subscription decided by------------. B. calls in advance C. 5% C. When shares are forfeited. A.5% D. share holders B. A. distributed as dividend ANSWER: C 45. absorption B. debenture holders D. 10% ANSWER: D 47. 7. paid up amount on shares ANSWER: D 46. issue price B. S.16. internal reconstruction D. market price C. distribution of equity dividend D. external reconstruction ANSWER: B 48. refunded B. the amount already received is----------------. Preference dividend is to be paid before-----------. When two or more companies going to liquidation and new company is formed then it is known as--------------. A. payment of debenture interest B. 2. treated as revenue profit C.20/printqp.

shares B. equity shareholders account C. Company can issue redeemable preference shares which are redeemable within--------------. internal reconstruction D. premium from issue of share C. capital profit C. goodwill account B. 7 years from the date of issue D. none of the above ANSWER: C 52.. A. 2 years from the date of issue.16. revenue reserve ANSWER: A 54. A. goodwill and capital account D. Share capital account B. Post acquisition profits are treated as---------------. A. absorption B. reserves D. A. none of the above ANSWER: B 51.2. amalgamation B. amalgamation C. capital reserve account D. 10 years from the date of issue. In what form is the profits of the company are distributed amongst the shareholders? A. Revenue profit B.20/printqp. A. Accumulated losses in the vendor company should be transferred to------------. reconstruction D. The dividend that is declared between AGM is------------. profit and loss account ANSWER: B 53. capital reserve D. http://172. When an existing company takes over the business of one or more existing companies. Interim dividend 8 of 22 1/20/2017 11:54 AM .. dividend ANSWER: D 56. 5 years from the date of issue C. external reconstruction ANSWER: C 50. B. ANSWER: B 55. A. it is called A. absorption C.php?heading=II BCom [AM] [2015-2018]. S. The cost of liquidation of the vendor company agreed to be paid by the purchasing company is debited to-----------in the books of the later company. capital reserve account C.

5% B. shares C. 10% C. A..2. property of all the shareholders ANSWER: B 60.php?heading=II BCom [AM] [2015-2018]. http://172. 2 directors B. 20 directors ANSWER: A 59. capital reserve C. 10 directors D. 15% ANSWER: C 58. property of the government. final dividend C. between the date of incorporation and the date of commencement of business. Profit prior to incorporation is the profit earned----------------. A. property of the shareholders D. The excess of purchase consideration over net asset is--------------. B. A. between the date of incorporation and date of receipt of commencement of business. S. Forfeited shares to become-------------. A. 5 directors C. B. Purchase consideration is payable in-------------. 9 of 22 1/20/2017 11:54 AM . goodwill account C. B.20/printqp. A. preliminary expenses ANSWER: C 63. The total remuneration payable to the managerial personnel should not exceed----------net profits. Private company has minimum--------------.16. Realisation expenses met by the purchasing company should be debited to-------------. goodwill D. between the date of purchase and date of incorporation C. 11% D. half-yearly dividend ANSWER: A 57. property of the company C. vendor account D. capital reserve account ANSWER: C 62. cash B. realisation account B. A.. debentures D. A. any one of the above or all of the above ANSWER: D 61. securities premium B. semi dividend D.

A. none of the above ANSWER: C 66. http://172.. adjusted time ratio ANSWER: A 70. should be---------.incorporation period D. none of the above ANSWER: C 68. Loss prior to incorporation should be debited to-----------------.incorporation period C. revenue reserve account C.2. time ratio B. S. between the date of purchase of business and date of commencement of business.20/printqp. goodwill account B. preliminary expenses account ANSWER: B 67.16. Sales ratio D. A. ANSWER: B 64. sales ratio D. D. capital reserve account D. ANSWER: B 10 of 22 1/20/2017 11:54 AM . Profit prior to incorporation should be credited to---------------. Gross profit is to be apportioned between pre and post incorporation periods in-----------------. Time ratio B. both the company and the vendor D. Posted in post incorporation period ANSWER: C 69. posted in pre .php?heading=II BCom [AM] [2015-2018]. Profit prior to incorporation belongs to ---------------. capital reserve account D.. posted in pre . time ratio or posted only in post. for a period before acquisition of business. goodwill account C. posted in post. divided in adjusted time ratio. A.incorporation period. A. Audit fees should be divided between pre and post incorporation periods in---------. divided in time ratio B. C. the vendor C. A. divided time ratio B. adjusted time ratio C. The salary paid to manager. A. the company B. revenue reserve B. Bad debts recovered which was written off before purchase of business should be-----------. A. none of the above ANSWER: A 65. divided in sales ratio C.incorporation period D.

ANSWER: D 76. Under the heading Secured loans D. capital expenses B. fixed assets B. None of the above ANSWER: A 72. neither of the two D. investment ANSWER: C 11 of 22 1/20/2017 11:54 AM . B. fixed assets B. time ratio C. D.2.16. Discount received from creditors and carriage inwards should be divided between pre and post incorporation periods in----------------. In the liabilities side of the company's balance sheet. purchase ratio C. liquidity B. Preliminary expenses are an example of--------------------- A. In the balance sheet of a limited company. either liquidity or permanence. investments C. In the asset side of the company's balance sheet. adjusted time ratio D. miscellaneous expenditure ANSWER: D 77. permanence C. S. Sales ratio D. assets are arranged in the order of---------------. outstanding expenses ANSWER: C 75. current assets C. A. ANSWER: A 73. A. None of the above. Under the heading Reserves and Surplus. Sales ratio B.20/printqp. fictitious asset like Discount on issue of debentures are shown under the heading A. Under the heading current liabilities C.php?heading=II BCom [AM] [2015-2018]. A.. By subtracting the amount from the called up capital. revenue expenses C. A. fictitious asset. http://172. calls in arrears are shown------------. current assets D. A. 71. pre-paid expenses D. Interest-paid to vendor should be divided between pre and post incorporation periods in --------. adjusted time ratio B. ANSWER: B 74.. Advance payment of tax is in the nature of -----------.

fixed in nature C. Interest on debentures is calculated on-------------.. capital reserve C. share capital ANSWER: C 79. 1% of the annual profit B. optional D. P&L a/c B. dividend equalization fund ANSWER: B 81. 10% of the annual profits ANSWER: C 82. Face value D. S. Profit on cancellation of own debentures are transferred to--------------. The balance of sinking fund investment account after the realization of investment is transferred to --------------. general reserve D. or manager) should not exceed-----------------. ANSWER: B 80.16. A. the cum-interest price C. Market price ANSWER: C 83. general reserve account ANSWER: C 12 of 22 1/20/2017 11:54 AM . sinking fund account D..php?heading=II BCom [AM] [2015-2018]. variable in nature B. current liabilities C. A. A. Own debentures account (at the time of purchase of own debentures) is always debited with A. Issue price B. face value ANSWER: C 84. the fair value B. 3% of the annual profits C. A. secured loans D. Interest on debenture is----------. appropriation. Debentures account C.20/printqp. the ex-interest price D. 5% of the annual profits D.2. http://172. P&L account B. 78. The maximum remuneration payable to a part time director (without managing director(s) or whole time director(s). Debentures are shown in the balance sheet under the heading A. unsecured loans B. A. Redeemable price C.

shareholders B. AS-8 B. S. Purchase consideration AS-14. AS-20 C. AS-14 D. debenture holders and shareholders. Consolidation of share capital D. Pooling of interests method is used to account for amalgamation in the nature of ---------------.16. 95 D. It is case of--------------. sub-division of share capital C. A. Rs. 100 ANSWER: A 86. D. Accounting standard for Amalgamation is-------------------. It decides to convert its capital into 80.000 equity shares of Rs.2. A company has issued capital of Rs. A. None of the above ANSWER: B 87.php?heading=II BCom [AM] [2015-2018]. 10 C. A.000 equity shares of Rs. None of the above ANSWER: A 90. the amount which should be debited to loss on redemption of debenture account is --------------. A. 100 is issued for Rs. merger D. AS-3 ANSWER: C 88. None of the above ANSWER: A 89. should include cash and securities agreed to be given by the transferee company to transferor company's ---------------. Expenses of liquidation of transferor company may be shown as 'Reimbursement' in transferor company's books.. creditors.. 5 B. A.20/printqp. 95 and it is redeemable at Rs. sale C. A. 2 years B. purchase B. http://172. Rs. A. neither company ANSWER: B 91. 5 each. 8 years 13 of 22 1/20/2017 11:54 AM . 85. Decrease in unissued capital B. transferee company C. if the expenses are agreed to paid by------------. Rs. Rs. When debentures of Rs. both the companies D. Excess purchase consideration paid to the transferor company and debited to goodwill account under the purchase method of accounting for amalgamation should be written off within a period of -------------. shareholders & debenture holders C.5 premium. transferor company B. 10 each fully paid. 40.

The profit made on acquisition of business is credited to------------. A. 5 years ANSWER: D 92. purchase consideration B. lump sum ANSWER: A 93. P&L account B. capital reserve account D. net asset D. acquisition cost D. Loss prior top incorporation is to be shown in the assets side of the balance sheet under the heading----------------. A. purchase ratio ANSWER: A 97. A. P&L account and Balance sheet 14 of 22 1/20/2017 11:54 AM . The price payable by a company for business acquired is known as-------------. net worth C. time ratio B. Share premium B. capital reserve C. A. fixed assets B. S. capital redemption reserve ANSWER: B 94. securities premium C. Goodwill account ANSWER: C 96. A.16.php?heading=II BCom [AM] [2015-2018]. C. A. goodwill B. sales ratio C.20/printqp. If the net tangible assets exceeds the purchase consideration. http://172. Rent is divided in the ratio while calculating pre. adjusted time ratio D. premium D. 20 years D. Final accounts of a company include-----------------------.incorporated profit. When shares or debentures are issued at a premium ------------account should be credited with the amount of the premium. Miscellaneous expenses ANSWER: D 98. loans and advances C. P&L appropriation account C. profit on issue of shares ANSWER: B 95. the difference will be treated as---------------. A...2. current assets D.

A. debenture holders ANSWER: B 105. -----------section of the companies Act provides the power of issuing debentures. 293 B. ANSWER: B 101. loans and advances C. http://172. fixed assets B. Reserves and surplus C. the price is------------- A.2. Trading. share capital B. A. P&L account. Miscellaneous assets ANSWER: A 100. Loose tools is shown in the balance sheet under the head---------------. current liabilities D. Debentures can be issued ----------------. sinking fund B. debenture D. P&L account. A. for other than cash consideration only. current assets D. When debentures are redeemed out of profits. If the quoted price includes the interest on the debenture form the previous interest to till the date of sale. current provision. A. S..16. Trading. P&L appropriation account and Balance Sheet ANSWER: D 99.php?heading=II BCom [AM] [2015-2018]. C. P&L account and P&L appropriation account C. A. The surplus found in P&L appropriation account is shown under the head--------------------. Current liabilities B.20/printqp. ex-interest price 15 of 22 1/20/2017 11:54 AM . fixed assets C. for cash consideration only B. either for cash or for other than cash or as collateral ANSWER: D 103. A. 287 ANSWER: B 102. miscellaneous expenses ANSWER: D 104. Discount and loss on issue of debentures are shown under ---------------. P&L appropriation account D.. reserves and surplus D. the profit equivalent to the debenture is transferred to ------------. 295 D. B. debenture redemption fund C. as collateral securities D. 292(1) C.

B.20/printqp. A. creditors B. Increases in the value of fixed assets at the time of reconstruction will be credited to ------------------. cum-interest price C. cum-interest price C. Debentures represent the------------------. interest free price D.. A. whole sale price ANSWER: B 106. whole sale price ANSWER: A 107. General Reserve account D. None of the above ANSWER: D 111. Equity share capital B.. capital redemption reserve ANSWER: A 108. customers ANSWER: A 110. Capital reduction account ANSWER: A 112. long term borrowings of a business D. ex-interest price B. A. Manager's share in the business B. capital reduction 16 of 22 1/20/2017 11:54 AM . Share capital account C.16. capital profit C. http://172. Absorbed D. premium D. Amalgamated C. Debenture holders are the ---------------------. revenue profit B.2.php?heading=II BCom [AM] [2015-2018]. Sinking fund can be created out of------------------. A. the price is-----------. liquidated B. interest free price D. If the quoted price does not include the interest on debenture from the previous interest to till the date of sale. A. Decrease of liability at the time of internal reconstruction----------. Capital reserve account B. owners C. A. borrowers D. investment by shareholders in business C. A. In case of internal reconstruction the existing company will be------------. trade creditors ANSWER: C 109. S.

S. None of the above ANSWER: C 116. preference share capital ANSWER: B 113. For writing off the accumulated losses under the scheme of capital reduction we debit--------------------. advances D.16. stock B. A. Decreases B. capital reserve D. In case of consolidation of share capital the total number of shares of the company-------------. surrendered share account ANSWER: D 114. central government C. cannot D. Capital reserve account B.2.php?heading=II BCom [AM] [2015-2018]. Income B. At the time of reorganisation the amount of shares surrounded by shareholder is transferred to---------------. To carry out the scheme of capital reduction ----------------approval is necessary. A. court B. A. general reserve account D. http://172.. C. capital reserve account C.. general reserve account D. Accumulated loss account ANSWER: A 115. 17 of 22 1/20/2017 11:54 AM . share capital account B. Does not change C. Company Law Board D. A. Increases C. capital reduction account C. registrars of company ANSWER: C 118. interest ANSWER: D 119. A. Reserves of the company -----------------be utilised in meeting the accumulated losses at the time of internal reconstruction. arrears ANSWER: D 117. capital C. their claim against the company-------------be reduced. Equal D. When uncalled amount of share capital is to be reduced then the amount of paid up capital of the company is called--------------. If the creditors are willing.20/printqp. A.

bank D. A. the competent court. Revaluation a/c D. Any decreases in the value of assets at the time of internal reconstruction. capital reduction B. Internal D. Memorandum of Association B. capital reduction a/c C. Surplus ANSWER: A 121. S.. Central government B. will be changed to-------------. cannot C. can B. A. Debtors D.2.20/printqp. controller of capital issues C. outsources C. Alteration of share capital is effected by a company if it is authorized by the-------------------------. Articles of association C.php?heading=II BCom [AM] [2015-2018]. creditors C. A. A. A company can convert fully paid ---------------into stock and also reconvert ----------------back into 18 of 22 1/20/2017 11:54 AM . none of the above ANSWER: A 120. Share capital B.16. may be D.. External B. The capital reduction scheme can be implemented only after getting permission from-------------. Bank overdraft ANSWER: A 126. shareholders D. Consolidation of shares does not affect the amount of----------------. http://172. ANSWER: C 124. A. A. The amount of surrendered shares is credited to --------------account A. share capital a/c ANSWER: B 125. P&L ANSWER: C 122. Goodwill a/c B. The various losses can be written with the help of capital reduction account at the time of-------------- reconstruction. capital C. Board of directors ANSWER: A 123. share holders D.

share holders a/c B. surrendered shares account B. eliminated B. In the scheme of capital reduction. share. http://172. preference share capital C. Asset account ANSWER: A 19 of 22 1/20/2017 11:54 AM . share holders a/c ANSWER: D 132. For refunding surplus capital-----------------is credited. A. Bank account D. capital reduction D.20/printqp. A. creditors a/c C.php?heading=II BCom [AM] [2015-2018]. Gains B. ANSWER: A 130. capital reserve account D. A. Debentures C. A.16. such as arrears of preference dividend. must be met out of-----------account. Any debit balance in P&L a/c represents ------------and such losses will be written off as part of capital reorganization.. Bank account C. resources C. Liabilities a/c D. none of the above. shares A. accumulated losses D. For any sacrifice made by debenture holders or creditors--------------is credited.2. securities B. When surrendered shares are reissued -------------------is debited. Inter company 'owing' should be -------------while preparing the balance sheet of the transferee company after completion of amalgamation.. capital reduction account ANSWER: A 131. capital reduction account B. Incomes ANSWER: C 128. appointed D. debtors ANSWER: C 129. A. any new liability to be provided for. A. not eliminated C. Deposits D. income reduction B.stock ANSWER: D 127. trading C. S.

Purchasing company's account C.16. P&L a/c C. A. Realisation a/c C.. creditors a/c B. S. Realisation account D. 133. Realization a/c D. Debenture a/c ANSWER: A 136. Preference share capital a/c D. purchasing a/c B. realisation a/c ANSWER: D 134. For transferring liabilities taken over ---------------is debited. shares in purchasing a/c ANSWER: C 139.php?heading=II BCom [AM] [2015-2018]..20/printqp. Assets a/c B. For transferring assets to realisation a/c-------------------is debited. A. Bank account ANSWER: B 137. Bank a/c C. A.2. Debenture holders a/c C. Purchasing company's account B. Bank a/c C. For discharge of preference share capital--------------is debited. Purchasing company's a/c B. Purchasing a/c D. For payment of liabilities not taken over ---------------is debited. Purchasing company's a/c B. share holders a/c ANSWER: B 138. http://172. Liability account B. preference share holders a/c D. None of the above ANSWER: C 135. Liabilities a/c C. For receiving the purchase consideration ----------------is credited A. Debenture a/c D. For purchase consideration receivable----------------is debited A. For realizing assets not taken over ----------------is debited A. Liabilities a/c D. 20 of 22 1/20/2017 11:54 AM . If expenses are to be borne by the purchasing company -----------is debited A. Equity share holders a/c ANSWER: A 140.

Liquidation expenses paid by the purchasing company are to be debited to ------------------. Absorption C. A.20/printqp. None of the above ANSWER: A 144. Bank account C. 8. Average of the above two D. Business purchase account C. Preliminary expenses account B. None of the above. A Ltd takes over the net assets of B Ltd valued at Rs. Bank a/c C. Market price B. For final payment to the equity share holders ----------------is debited. Debenture ANSWER: B 141. 5. Recreation expenses D. A. A. Two or more companies liquidate to be taken over by the existing company. C. When the purchasing company allots shares at market price the calculation of purchase consideration is based on-----------------.. D. A. http://172. B.000 to preference share holders and balance to the debenture holders. S.16. When two or more companies liquidate to form a new company is is called-----------------. The 21 of 22 1/20/2017 11:54 AM .2. 2. ANSWER: D 146. shares in purchasing a/c B.. Two or more companies are liquidated to form a new company.00.00. Reconstruction D. None of the above.000 to equity share holders Rs.php?heading=II BCom [AM] [2015-2018]. A. A. A. None of the above ANSWER: B 143. Absorption is said to be taken place when--------------------. Paid up value C. Equity share holders a/c B.000 and agrees to pay Rs. preliminary expenses account D.00. A Company is formed to take over the other company. Preference share capital D. None of the above ANSWER: A 145. ANSWER: A 142. realization D. For realization profit and loss account ---------------is credited. Amalgamation B. Debenture holders account B. None of the above ANSWER: A 147. preference share capital C.

X Ltd agrees to pay Rs. Two shares of A Ltd for Three shares of B Ltd C. Preference share capital account. The basis of exchange on intrinsic value between A Ltd and B Ltd should be-------------------. 3.00..20/printqp. The purchase consideration agreed to be paid is-------------------. No entry is required.50.00.000 to debenture holders.50. 10. Three shares of A Ltd for Two shares of B Ltd D. 5.00.00. http://172.00.000 ANSWER: A 149.16. Rs. Rs. Rs. Rs.000 D.00.000 and Rs. 2.000 C.000 to preference share holders and Rs.000 B. ANSWER: C Staff Name Bhuvaneswari V . Equity share stock account.000 to equity shareholders. 6. A. 2.2. The intrinsic values of shares of A Ltd and B Ltd are Rs. 5. Rs. 6. A. A Ltd takes over B Ltd and agrees to allot its shares. When a company converts its equity shares into capital stock then the account to be credited is--------------.000. 8. 5.00.000 B. S.00. C. None of the above ANSWER: B 150. D.php?heading=II BCom [AM] [2015-2018].7.000 C. X Ltd acquires the business of Y Ltd whose net assets as per the balance sheet work out to Rs.000 D. Rs. None of the above ANSWER: A 148. Rs. Equity share capital account B.00. 22 of 22 1/20/2017 11:54 AM . purchase consideration paid by A Ltd is----------- A. One share of A Ltd for one share of B Ltd B.00. Rs. A.. 100 respectively. 7.