Financial Accounting Objectives Sem V PDF

TY B Com MORE CLASSES
Financial Accounting Your Partner in Studies

(Objectives)
AMALGAMATION OF COMPANIES (AS-14)

MULTIPLE CHOICE QUESTIONS
1. If the ABC Limited and DEF Limited are taken over by a new company XYZ Limited
a. It is called absorption c. It is called external reconstruction
b. It is called amalgamation d. It is called internal reconstruction
2. If the business of an existing company ABC Limited is taken over by an existing company PQR
Limited, it is called
a. external reconstruction b. absorption c. amalgamation
3. if the business of ABC Limited , a loss-making company is taken over by a new company ABC (New)
Limited ,it is called
a. External reconstruction b. absorption c. amalgamation
4. Accounting for amalgamation is governed by
a. AS – 1 b. AS – 13 c. AS – 14 d. AS - 11
5. According to AS 14, Transferor Company means the company
a. amalgamated into another c. Which is newly formed
company d. None of the above
b. Into which is amalgamated
6. According to AS 14,Transference Company means the Company
a. amalgamated into another c. Which is liquidated
company d. None of the above
b. Into which is amalgamated
7. According to AS 14, Amalgamation fall into two categories
a. amalgamation and absorption
b. merger and purchase
c. amalgamation and reconstruction
8. On amalgamation, profit & loss A/c (Dr.) balance of the vendor company
a. is closed by debit to realization A/c
b. is closed by credit to Equity shareholders A/c
c. is closed by debit to Equity shareholders A/c
9. On amalgamation, Sinking Fund A/C appearing on the liabilities side of the vendor company
a. is closed by credit to purchasing company A/c
b. is closed by credit to realization A/c
c. is closed by credit to equity shareholder
10. On amalgamation, if pref. shares are settled at a premium
a. the premium is credited to Realization A/c
b. the premium is debited to Realization A/c
c. the premium is credited to security premium A/c
11. Shareholders holding not less than 90% of the face value of the equity share capital in the vendor
company become equity shareholders in the purchasing company
a. if the amalgamation is in the nature of merger as defined under AS 14
b. if the amalgamation is in the nature of external reconstruction
c. if the amalgamation is in the nature of purchase as defined under AS14
12. As per AS-14 purchase consideration is what is payable to
a. Shareholders b. Shareholders and debenture holders c. Shareholders and creditors
13. When amalgamation is in the nature of merger, the accounting method to be followed is
a. Equity method b. Purchase method c. Pooling of interests method
14. Amalgamation adjustment account is opened in the books of transferee company to incorporate
a. The assets of the transferor company
b. The liabilities of the transferor company
Page 1 of 14
(Objectives)
c. The statutory reserve of the transferor company

15. Goodwill arising on amalgamation is to be
a. Retained in the books of the transferee company.
b. Amortized to income on a systematic basis
c. Adjusted against reserves and profit and loss account of the transferee company.
16. Under the pooling of interests method, the difference between the purchase consideration and share
capital of transferee company should be adjusted to:
a. General reserves c. Goodwill or capital reserves
b. Amalgamation adjusted account d. None of the above
17. Pooling of interest is a method of
a. Charging Deprecation c. Calculation of PC
b. Accounting for Amalgamation d. None of the above
18. The adjusted entry passed to eliminate the inter-company bills of exchange is
a. Debit bill payable a/c credit bills receivable a/c
b. Debit bill receivable a/c credit bills payable a/c
c. Debit amalgamation adjustment a/c, credit statutory reserves a/c
19. Under ‘purchase method’, any excess of the amount of purchase consideration over the net acquired
assets of the transferor company should be recognized as;
a. Capital Reserve b. Goodwill c. Profit & loss A/c
20. If there is a provision (RDD)against the debtor, such debtor are transferred to the realization a/c at
a. Net Amount (less RDD) b. Current market value c. Gross Amount
21. Under payments method ,purchase consideration for the amalgamation means
a. Aggregate of shares and cash to shareholders
b. Aggregate of shares and cash & payment to debenture holders
c. Shares , cash, payment to debenture holders and expenses of realization
22. Loss or profit on realization a/c is transferred by the transferor company, under amalgamation to
a. Preference shareholders a/c b. Equity shareholders a/c c. P & L Appr a/c
23. Intrinsic value of each equity share of the transferor company is Rs. 250 and that of the transferee
company is Rs. 400. The ratio of exchange of shares on the basis of intrinsic value is
a. 2 : 1 b. 8 : 8 c. 8 : 5
STATE WHETHER TRUE OR FALSE

1. Two or more companies combining to form a new company are called absorption. FALSE
2. When the transferee company decides to compensate the transferor company on the basis of fair
values of the assets and liabilities, the method of computing the purchase consideration is termed ‘net
payments method.’ FALSE
3. According to AS-14, purchase consideration is the total amount agreed to be payable to different
interests like shareholders, debenture holders, trade creditors etc. FALSE
4. Goodwill arising on amalgamation, as per AS-14 is to be retained in the books of the company till the
winding up. FALSE
5. Under the purchase method of accounting, the transferee company incorporates in its books the
assets, liabilities, and statutory reserves of the transferor company. TRUE
6. Under the pooling of’ interest method’, the transferee company incorporates in its books only the
external liabilities and assets of the transferor company. TRUE
7. In computing purchase consideration by ‘net assets method’ all assets including fictitious assets
should be considered. FALSE
8. Capital reserve arises only when the amalgamation is in the nature of ‘merger’. FALSE
9. Under external reconstruction, there is one liquidation and one formation. TRUE
Page 2 of 14
(Objectives)
10. Under Absorption, there are two or more liquidation and one formation. FALSE
11. In amalgamation of companies, there are two or more liquidation and one formation. TRUE
12. Under the ‘pooling of interest method’ the transferee company incorporates the assets and liabilities
of the transferor company at fair values. FALSE
13. Under the’ purchase method’ the transferee company incorporates the assets and liabilities of the
transferor company at book value. FALSE
14. Under the purchase method, statutory reserves of the company are incorporates the assets and
liabilities of the transferor company at book values. FALSE
15. Fictitious assets are to be transferred to Amalgamation Adjustment A/c in books of the transferor
company, on amalgamation by purchase. FALSE
Page 3 of 14
(Objectives)
INTERNAL RECONSTRUCTION
MULTIPLE CHOICE QUESTION

1. Consolidation or sub-division of share capital of the company involves-
a. Alteration of Share Capital c. Reduction of Share Capital
b. Variation of Shareholders’ Right d. Compromise /Arrangement
2. Change in the rate of preference dividend payable in future without any change in the amount of
capital is known as
a. Reduction of Share Capital c. Variation of Shareholders’ Right
b. Alternation of Share Capital d. Compromise /Arrangement
3. Conversion of cumulative preference share into non-cumulative preference shares(without any
change in the amount of capital), in a scheme of reconstruction ,is known as
4. Surrender of fully paid shares amounts to
5. Debenture holders accepting a cash payment less than the face value of their debentures amounts to
a. Reduction of Share Capital
b. Variation of Shareholders’ Right
c. Compromise /Arrangement
6. Creditors accepting part payment of their claims, in a scheme of reconstruction, amounts to
7. Share capital (Rs 1)A/c 100,000
To share capital (Rs 10) A/c 100,000
The above entries, in a scheme of reconstruction, records
a. Consolidation of share capital c. Conversion of share into stock
b. Sub-division of share capital d. Conversion of stock into share
8. Share capital(Rs100)A/c 100,000
To share capital (Rs 10) A/c 100,000
The above entries, in a scheme of reconstruction, records
a. Consolidation of share capital c. Conversion of share into stock
b. Sub-division of share capital d. Conversion of stock into
9. Shares of Rs.100 each (paid-up value Rs.90 each) are reduced to shares of nominal value of Rs.90
each in a scheme of reconstruction.
a. There is a credit of Rs. 10 per shares to Capital Reduction A/c
b. There is a credit of Rs. 90 per shares to Capital Reduction A/c
c. There will be no credit to Capital Reduction A/c
10. Shares of Rs.100 each paid-up value are reduced to shares of nominal value of Rs.10 each in a
scheme of reconstruction
a. There is a credit of Rs.10 per shares to Capital Reduction A/c
b. There is a credit of Rs.90 per shares to Capital Reduction A/c
c. There will be no credit to Capital Reduction
11. If the pref.shareholders give up the claim for Arrears of Preference Dividend shown as contingent
Liability in Notes to Accounts in a scheme of reconstruction
a. Capital Reduction A/c will be debited
b. No entry is passed
c. Preference Dividend Payable A/c will be credited
Page 4 of 14
(Objectives)
12. On cancellation of surrendered shares in a scheme of reconstruction

a. Share capital A/c will be debited
b. Share Surrendered A/c will be credited
c. Capital Reduction A/c will be credited
13. In Internal Reconstruction
a. No company is liquidated
b. Only one company goes into liquidation
c. One or more companies go into liquidation
14. Reduction of shares capital of a company means reduction in
a. Only called up share capital
b. Subscribed and/or paid-up share capital
c. Only authorized capital
15. Balance in capital Reduction A/c is generally transferred to
a. General reserves b. Capital reserves c. Profit & loss A/c
16. The existing 1,000 shares of Rs 1 each are altered to 100 shares of Rs 10 each. This is known as
a. Consolidation b. Sub-division c. Surrender
17. The existing 1,000 shares of Rs 100 each are altered to 10,000 shares of Rs 10 each. This is known
as
a. Consolidation b. Sub-division c. Conversion in stock
18. While granting approval to any scheme of Capital Reduction, the court may direct the company to add
the following words to its name for such period as it thinks fit.
a. And Reduced b. And Unlimited c. And Liquidated
19. Reconstruction refers to an arrangement, whereby
a. A previously unprofitable or a weak company is reconstructed by certain measures
b. Two companies come together to form a new company
c. Assets and liabilities of the company are not revalued
20. For capital reduction under internal reconstruction, authorization/approval is required from
a. Shareholders c. Court
b. Articles of Association d. All the above

1) A company cannot subdivide share of larger domination into shares of smaller denomination. FALSE
2) A company is free to reduce or extinguish the uncalled liability of its members. FALSE
3) No permission from the court is required for a company to write off or cancel any paid up capital
which is lost or not represented by available assets. TRUE
4) Cancellation of unissued capital is also a case of capital reduction. TRUE
5) Only sick companies undertake capital reduction. TRUE
6) Permission of the court is required for a company to return capital which is in excess of the
requirements of the company. TRUE
7) No journal entry is required for the cancellation of un-issued share capital. TRUE
8) After granting the scheme of capital reduction the court may order the use of words “And Reduced
“after the name of the company till its winding up. FALSE
9) Consent of the creditors is required if capital reduction involves diminution of liability regarding
uncalled capital or return of Paid-up capital. TRUE
10) Consent of the creditors is required if capital reduction involves the writing off of paid-up capital lost or
not represented by available assets. TRUE
11) Any surplus in the capital reduction account after writing off lost capital is transferred to General
Reserve. FALSE
Page 5 of 14
(Objectives)
12) In a scheme of reconstruction amount of shares surrendered by shareholders is transferred to capital

reduction account. FALSE
13) Amounts sacrificed by shareholders in a scheme of internal reconstruction are credited to capital
reserve account. FALSE
14) For a company to carry out capital reduction, permission is required from Central Government.
FALSE
15) Security premium account can be transferred to Capital Reduction Account. TRUE
16) External Reconstruction involves reduction in capital. FALSE
Page 6 of 14
(Objectives)
Investment Accounting
Multiple Choice Questions

1) Following is not a Fixed Income Bearing Security
a. Debentures b. Equity shares c. Preference Shares d. Government
security
2) Interest is always calculated on the
a. Market Value b. Nominal Value c. Book Value d. Weighted Average
cost
3) Interest on bonds accrues
a. On the last day of the financial year
b. On due dates fixed in advance
c. On the date fixed by board resolution
4) Interest is paid
a. To the holder of the security on the due date prorate as per his actual period of holding
b. To the original investor if the security is sold ex-interest
c. to the holder of the security on the due date irrespective on his actual period of
holding
5) XYZ buys 200 Debentures of nominal value of Rs 100 each of ICICI LTD .at Rs 98 (ex-interest)
on 1-3-2012 from ABC. Interest@12% p.a. is to be paid half-yearly on 30th June and 31st
December price paid by XYZ towards capital is
a. Rs 20,000 b. Rs 19,600 c. Rs 20,200 d. Rs 19,800
6) XYZ buys 200 Debentures of nominal value of Rs 100 each of ICICI LTD .at Rs 98 (ex-interest)
December Total payment made by XYZ is
a. Rs 20,000 b. Rs 19,600 c. Rs 20,200 d. Rs 19,800
7) XYZ buys 200 Debentures of nominal value of Rs 100 each of ICICI LTD .at Rs 101 (cum-
interest) on 1-3-2012 from ABC. Interest@12% p.a. is to be paid half-yearly on 30th June and
31st December price paid by XYZ towards capital is
a. Rs 20,000 b. Rs 19,600 c. Rs 20,200 d. Rs 19,800
8) XYZ buys 200 Debentures of nominal value of Rs 100 each of ICICI LTD .at Rs 101(cum-interest)
December. Total payment made by XYZ is
a. Rs 20,000 b. Rs 19,600 c. Rs 20,200 d. Rs 19,800
9) ABC sells 100 Debentures of nominal value of Rs 100 each of ICICI LTD .at Rs 98(ex-interest) on
1-3-2012 from ABC. Interest@12% p.a. is to be paid half-yearly on 30th June and 31st
December. Nominal value of investments sold is
a. Rs 20,000 b. Rs 19,600 c. Rs 20,200 d. Rs 19,800
10) XYZ buys Debentures of nominal value of Rs 100 each of ICICI LTD .at Rs 98 (ex-interest) on 1-
3-2012 from ABC. Interest of Rs 400 has accrued from the last due date till the date of purchase.
In entry for recording this investment in the books of XYZ
a. Rs 400 will be credited to interest A/c
b. Rs 400 will be debited to interest A/c
c. Rs 400 will be credited to investment A/c
11) On each sale of investment, the profit or loss is calculated as
a. Sale Price Less Simple Average cost
b. Sale Price Less Weighted Average cost
c. Sale price less Cost on FIFO basis
12) Profit on sale of investment
Page 7 of 14
(Objectives)
a. Is transferred to profit & loss a/c only if the investment is current investment
b. Is transferred to profit & loss a/c
c. Is transferred to profit & loss a/c only if the investment is long term investment
13) If the market value of investment held as current assets is less than cost
a. Difference is credited to profit & loss a/c
b. Difference is debited to profit & loss a/c
c. Difference is debited to capital reserves a/c
14) Dividend on the shares accrues
a. On the last day of the financial year
b. On due dates fixed in advance
c. On the date it is declared
15) Any reduction to market value of current investment from costs , on valuation date is debited to
a. Revaluation reserve c. Capital reserves
b. Profit and loss account d. General reserves
16) Long term investment are carried at
a. Cost Price b. Cost or Market Value whichever is less c. Market
Value
17) Short term / Current investment are carried at
a. Cost Price b. Cost or Market Value whichever is less c. Market
Value

1. Interest is always calculated on the Market Value of the security. FALSE
2. Interest is paid to the holder of the security on the due date, in respect of his actual period of
holding. FALSE
3. If the security is transferred on the exact date when interest falls due, the entire interest upto that
due date belongs to the purchaser. FALSE
4. If the security is transferred on any date other than due date for payment of interest, the
purchaser has the right to claim the interest upto the date of transfer of income. FALSE
5. If the security is transferred on any date other than due date for payment of interest, the seller as
the right to claim the interest upto the date of transfer of income. FALSE
6. Ex –Interest price Less Accrued interest=Cost of the investment. FALSE
7. Total payment by purchaser = Ex- Interest Price - Accrued interest. FALSE
8. Dividend is always calculated on the Face Value or Nominal Value of the shares. TRUE
9. Dividend shares accrue on the date of the book-closure by the company. FALSE
10. Dividend on shares is paid to the holder of the shares on the date of declaration, irrespective of
his actual period of holding. TRUE
11. When bonus shares are received only the Nominal Value of such bonus shares is entered in the
investment A/c. TRUE
12. When the rights are sold (without subscribing) no entry is made in the Investment Account.
TRUE
13. When the rights are sold (without subscribing), sale proceeds are credited to the Profit & Loss
Account. TRUE
14. Whether the price in cum-interest or ex-interest, accrued interest is always calculated and
entered in the income column in the Investment Account. TRUE
15. Profit on sale of current investment is transferred to profit & loss a/c; while profit on sale of long
term investment is transferred to Capital Reserve. FALSE
Page 8 of 14
(Objectives)
16. Investment held as long term investment is always valued at cost at the year-end as per AS13.
TRUE
17. Nominal Value Column in the Investment Account is only a memorandum column. TRUE
Page 9 of 14
(Objectives)
PREPARATION OF FINAL ACCOUNTS OF COMPANIES
MULTIPLE CHOICE QUESTIONS
1. Which of the following should be deducted from the share capital to find out paid-up capital?
a) Calls-in-advance c) Securities premium
b) Calls-in-arrears d) Bonus
2. Dividends are usually paid on
a) Authorized capital c) Paid up capital
b) Issued capital d) Reserve capital
3. Interim dividend of a company can be declared by
a) Only be shareholders
b) Boards of directors after approval of stock exchange
c) Board of directors
d) None of the above
4. Which of the following is not an example of contingent liability?
a) Liability in respect of bills discounted
b) Interim dividend
c) Liabilities under guarantee
d) All (a),(b) and (c) of the above
5. Assets to be sold, consumed or realized as a part of the entity’s normal operating cycle are:
a) Current Assets
b) Non-Current Assets
c) Classified as current or non- current in accordance with other criteria
6. A dividend declared by the company before its year-end and payable to its shareholders
three months after the end of the reporting period is classified as:
a) A non-current liability c) Equity
b) A current liability d) A current asset
7. Which of the following items should not appear under the head ‘Reserves and Surplus’ in
the balance sheet?
a) General reserve c) Proposed dividend
b) Sinking fund d) Securities premium
8. Which of the following items should not appear under the head ‘unsecured loans’ in the
balance sheet?
a) Sinking fund
b) Short –term loans from banks
c) Fixed deposits
9. Which of the following is not classified as inventory in the financial statements?
a) Finished goods
b) Work –in-progress
c) Stores and spares
d) Advance payment made to suppliers for raw materials
10. Which of the following items appears as an asset in Balance Sheet of Company?
a) Retained earnings
b) Sinking fund investment
c) Securities premium
11. As per schedule Vl of the Companies Act, 1956, under which of the following heads is
‘premium on issue of debentures’ shown in the balance sheet of a company?
a) Miscellaneous expenditure
Page 10 of 14
(Objectives)
b) Debentures
c) Reserves and Surplus
d) Current liabilities and provision
12. Declared dividend should be classified in the balance sheet as a
a) Provision c) Reserve
b) Current liability d) Current assets
13. The item ‘Interest Accrued on Investment’ appears in the balance sheet of a company
under the category of
a) Loans and advances c) Current liability
b) Current assets d) Investment
14. Which of the following denotes the dividend declared by the directors between two
annual general meetings?
a) Proposed dividend c) Interim dividend
b) Final dividend d) Unpaid dividend
15. Under which of the following heads is ‘Claim against a company not acknowledged as
debt’ shown?
a) Notes to balance sheet c) Current liability
b) Secured loans d) Current assets
16. Which of the following items does not come under the heading ‘provision’ in the Balance
Sheet?
a) Provision for taxation
b) Proposed dividend
c) Provision for contingencies
d) Unclaimed dividend
17. Companies with turnover of less than INR 100 crores are permitted are permitted under
the revised schedule Vl to round off the figures in the financial statements to the
a) Nearest millions, thousands, hundreds or decimals thereof
b) Nearest lakhs, thousands, hundreds or decimals thereof
c) Nearest lakhs or millions, thousands, hundreds or decimals thereof
d) Nearest lakhs or , thousands or decimals thereof
18. The choice rounding off to nearest hundreds or thousands is not available under the
revised schedule Vl to
a) Companies with turnover of INR 100 crores or more
b) Companies with turnover less than INR 100
c) Companies with turnover of INR 500 crores or more
d) Companies with turnover of INR 50 and 100 crores
19. The broad heading under which balance sheet is divided under the revised Schedule Vl
are
a) ‘liabilities’ and ‘assets’
b) ‘equity and liabilities’ and ‘assets’
c) ‘Source of funds’ and ‘application of funds’
d) ‘current’ and ‘non-current’
20. A trade receivable with an agreed credit term of three months which is not expected to
be realized within 12 months from the year –end, shall be classified as
a) Non-current b) Current
c) Partly current and partly non-current
21. Under the revised Schedule Vl, calls in advance should be disclosed under
a) Other current liabilities c) Non-current liabilities
b) Share Capital d) Loans and advances
Page 11 of 14
(Objectives)
22. Under the revised Schedule Vl, share options outstanding account should be disclosed
under
a) Share Capital c) Reserves and Surplus
b) Non-current liabilities d) Loans and advances
23. The revised schedule specifically requires ‘money received against share warrants’ to
be disclosed
a) Under share capital
b) Under ‘Other non-current liabilities’
c) As a separate line item as part of ‘shareholders’ funds’
d) Separately under ‘Equity’ on the face of the balance sheet but it is not
included in ‘shareholders’ funds’
24. Share application money which is due for refund in the event of over-subscription has to
be presented under
a) Under share capital
b) Under ‘other non-current liabilities’
c) Under ‘other current liabilities’
d) As a separate line item as part of ‘shareholders’ funds’
25. ‘Advances’ taken for goods and service to be supplied within 3 months from year-end
should be disclosed as an item under
a) ‘other payables’ under ‘other current liabilities’
b) ‘other loans and advances ’under ‘short-term borrowing’
c) Trade payables
26. Interest accrued and due on debentures
a) Should be added to debentures
b) Should be shown under other current liabilities
c) Should be shown under short-term provisions
d) Should be shown under short-term borrowing
27. Capital advances are required to be disclosed under
a) Long-term loans and advances
b) Capital work-in-progress
c) Intangible assets under development
d) Non-current investments
28. Revised schedule Vl requires disclosure of trade receivable that are outstanding for
more than six months
a) From the date of the sales bill
b) From the date of the balance sheet
c) From the date they are due for payment
d) From the date of the order
29. Which one of the following combinations of accounting assumption are fundamental
according to Accounting Standard 1:
a) Going concern ,consistency and historic cost
b) Entity , accrual and materiality
c) Conservatism ,accounting period and prudence
d) Going concern , consistency and accrual
30. Accounting standard 1 is
a) Recommendatory c) Optional
b) Mandatory d) No longer valid
31. Accounting polices
a) Are same for all concerns
Page 12 of 14
(Objectives)
b) Are laid down by law

c) Change from concern to concern
d) Are prescribed by AS 1
32. Purpose of Accounting Standard 1 is to establish a standard as to
a) The desirable accounting policies
b) The fundamental accounting assumptions
c) Disclosure of accounting policies
d) Preparation of final accounts
33. Vide accounting Standard 1, fundamental accounting assumption should
a) Always be disclosed
b) Be disclosed if not followed
c) Be disclosed in notes to accounts
d) Be disclosed in auditor’s report
34. The following factor should be considered while selecting and applying accounting
policies
a) Going concern c) Substance over form
b) Growth of business d) Solvency
35. The following factor should be considered while selecting and applying accounting
policies
a) Inflation c) Liquidity
b) Employee morale d) materiality
36. According to AS 1, Disclosure should be made of
a) Fundamental according assumptions
b) All accounting principles
c) All significant accounting policies
d) All Accounting policies
37. According to AS 1, Disclosure should form part
a) The Final accounts c) The directors report
b) The auditor’s report d) The books of accounts
38. According to AS 1, any change in accounting policy
a) Should never be made
b) Is not possible
c) Should be disclosed
d) Requires permission of the Institute of Chartered Accountants of India
TRUE OR FALSE
1) Every Profit and Loss Account of a company must comply with the requirements of part I of schedule
Vl of the Companies Act, 1956 as a far as possible. FALSE
2) An item of expenditure of the company is to be shown separately if it exceeds 1% of the total
revenue of the company. FALSE
3) If the dividend is not claimed within 7 year from the date of its transfer to special bank account, the
company retains it. FALSE
4) If the dividend is not claimed within 7 year from the date of its transfer to a special bank account, the
is transferred to the investor Education and Protection Fund. TRUE
5) Capital profit realized in cash can be used for paying dividend. TRUE
6) Future bad debts are usually estimated as percentage of debtors. TRUE
7) Unclaimed dividends are shown under Provision in the balance sheet. FALSE
Page 13 of 14
(Objectives)
8) Unexecuted contracts on capital account are shown under share capital in the balance sheet.
FALSE
9) Current liabilities are deducted from current assets so as to show the amount of Net Current Assets
in the balance sheet. FALSE
10) Provision for bad debts is shown under Provision in the balance sheet. FALSE
11) Capital work-in-progress is shown under Inventory (current Assets)in the balance sheet. FALSE
12) As per the Revised schedule Vl , the balance sheet can be prepared only in vertical form. TRUE
13) Current assets also include the current portion of non-current financial assets. TRUE
14) Current liabilities also include the current portion of non-current financial liabilities. TRUE
15) Under Revised Schedule Vl, Profit and Loss Appropriation account is to be prepared separately.
FALSE
16) Current investments are to be classified into trade and non-trade investments. FALSE
17) Shareholders ‘funds are always non-current. TRUE
18) Share application money not exceeding the issued capital and to the extent not refundable are to be
classified as non-current. TRUE
19) Fixed Assets would always be non-current, even if its balance useful life is less than 12 months.
TRUE
20) The bank deposits with more than 12 months balance maturity period as on balance sheet dates are
to be shown other “other non-current assets”. TRUE
Page 14 of 14

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TY B Com MORE CLASSES

Financial Accounting Your Partner in Studies

AMALGAMATION OF COMPANIES (AS-14)

c. The statutory reserve of the transferor company

STATE WHETHER TRUE OR FALSE

MULTIPLE CHOICE QUESTION

12. On cancellation of surrendered shares in a scheme of reconstruction

STATE WHETHER TRUE OR FALSE

12) In a scheme of reconstruction amount of shares surrendered by shareholders is transferred to capital

Multiple Choice Questions

STATE WHETHER TRUE OR FALSE

PREPARATION OF FINAL ACCOUNTS OF COMPANIES

MULTIPLE CHOICE QUESTIONS

b) Are laid down by law

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