Practice Test

Q1) The Micro Corporation Ltd. is authorized to issue 1,00,000 shares of equity shares. It had issued 30,000 shares. It has bought back 5,000 shares. As a result to these transactions. The no. of shares i)in authorized share capital ii) and iii) in issued share capital will be Show Answer

Q2) As per AS-14 purchase consideration is what is payable to Show Answer

Q3) Amalgamation adjustment account is opened in the books of transferee company to incorporate. Show Answer

Q4) Under the 'Purchase method of accounting', the transferee company incorporates in its books. Show Answer

Q5) Goodwill arising on amalgamation is to be Show Answer

Q6) Under the pooling of interests method the difference between the purchase consideration and share capital of transferee company should be adjusted : Show Answer

Q7) At the time of amalgamation, purchase consideration does not include Show Answer

Q8) The asset which is not taken under the Net assets method of calculating purchase consideration is Show Answer

Q9) Pooling of interest is a method of Show Answer

Q10) In which of the following methods, the purchase consideration is calculated on the basis of the agreed value of the shares of the transferor company ? Show Answer

Q11) The adjustment entry passed to eliminate the inter-company bills of exchange is Show Answer

Q12) Under 'Purchase method', any excess of the amount of purchase consideration over the net acquired assets of the transferor company should be recognized as? Show Answer

Q13) If there is a provision (RDD) against the debtors, such debtors are transferred to the Realisation a/c at Show Answer

Q14) Purchase consideration for the amalgamation means Show Answer

Q15) Loss or profit on realisation a/c is transferred by the transferor company, under amalgamation to Show Answer

Q16) 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 transferee co. to transferor co. on the basis of intrinsic value is Show Answer

Q17) In _______ a new company is formed to take over the business of two or more old companies. Show Answer

Q18) If the business of an existing company ABC Limited is taken over by another existing company PQR Limited, it is called _____. Show Answer

Q19) If the business of ABC Limited, a loss-making company, is taken over by a new company ABC (New) Limited, it is called as ____. Show Answer

Q20) Under AS 14, Purchase Consideration____ include payments made by the purchasing company to discharge the debentures of the vendor company. Show Answer

Q21) Under AS 14, Purchase Consideration ______ include payments made by the purchasing company to meet the liquidation expenses of the vendor company. Show Answer

Q22) AS 14 recommends that Goodwill arising on amalgamation should be written off within __years. Show Answer

Q23) The Amalgamation Adjustment Account should be deducted from ______ in the balance sheet of the purchasing company. Show Answer

Q24) If Purchase Consideration is ascertained under the Net Assets method, this ______ give rise to Goodwill or Capital Reserve. Show Answer

Q25) Dissolution expenses paid & borne by purchasing company are debited in its books to _____ Account. Show Answer

Q26) In merger, Shareholders holding not less than __% of the face value of the equity share capital in the vendor company become equity shareholders in thepurchasing company. Show Answer

Q27) An amalgamation in the nature of merger is brought about if shareholders holding ___ of the face value of equity shares become equity shareholders of the transferee company. Show Answer

Q28) Two or more companies combining to form a new company is called absorption. Show Answer

Q29) 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.' Show Answer

Q30) In the case of amalgamation there are two or more liquidations and one formation. Show Answer

Q31) According to AS -14 purchase consideration is the total amount agreed to be payable to different interests like shareholders, debenture holder, trade creditors etc. Show Answer

Q32) Under the purchase method of accounting, the transferee company incorporates in its books, the assets, liabilities, and statutory reserves of the transferor company. Show Answer

Q33) Goodwill arising on amalgamation, as per AS-14 is to be retained in the books of the company till the winding up. Show Answer

Q34) Under the 'pooling of interest method'. The transferee company incorporates in its books only the external liabilities and assets of the transfer company. Show Answer

Q35) In computing purchase consideration by 'net assets method' all assets including fictitious assets should be considered. Show Answer

Q36) Capital Reserve arises only when the amalgamation is in the nature of 'merger' Show Answer

Q37) Under external reconstruction, there is one liquidation and one formation. Show Answer

Q38) Under Absorption, there are two or more liquidations and one formation. Show Answer

Q39) In amalgamation of companies, there are two or more liquidations and one formation. Show Answer

Q40) Under the 'pooling of interests method' the transferee company incorporates the assets and liabilities of the transferor company at fair value. Show Answer

Q41) Under the 'purchase method'; the transferee company incorporates the assets and liabilities of the transferor company at book values Show Answer

Q42) Under the purchase method. Statutory reserves of the company are incorporated in the books of the transferee company, under Capital Reserves. Show Answer

Q43) Fictitious assets are to be transferred to Amalgamation Adjustment A/c in books of the transferor company, on amalgamation by purchase. Show Answer

Q44) Under the 'pooling of interests method' shares are issued by the transferee company at par. Show Answer

Q45) Accounting standard (AS) 14 does not distinguish between amalgamation and absorption. Show Answer

Q46) Absorption is said to take place when an existing company takes over one or more existing companies. Show Answer

Q47) In amalgamation, the old Companies taken over are known as the 'Vendor Companies'. And the new company taking over is knownas the 'purchasing Company'. Show Answer

Q48) In amalgamation, if the liquidation expenses are paid as well as borne by the purchasing company, no entry is passed in the books of the vendor company. Show Answer

Q49) In merger, the purchase consideration due to the equity shareholders of the vendor company is discharged by the purchasing company wholly by way of issue of Equity shares Show Answer

Q50) While liquidation of vendor co. Assets & Liabilities taken over are transferred to realisation A/c at book value Show Answer

Q51) In purchase method in the books of purchasing co. Assets & Liabilities of vendor co. are considered at book value Show Answer

Q52) Liquidation expenses of vendor co. paid by purchasing co. cannot form part of purchase consideration Show Answer

Q53) In case of pooling of interest method, transferee company should record assets at ______ Show Answer

Q54) The asset which is not taken under the Net assets method of calculating purchase consideration is Show Answer

Q55) AS-14 covers amalgamation of _______ Show Answer

Q56) Intrinsic value of each equity share of the transferor company is Rs.600 and that of the transferee company is Rs.800. The ratio of exchange of shares on the basis of intrinsic value is Show Answer

Q57) On amalgamation business is taken over by_____ Show Answer

Q58) Purchase consideration for the amalgamation means Show Answer

Q59) Accounting for amalgamation by merger is as per___ Show Answer

Q60) Goodwill arising on amalgamation is to be__________ Show Answer

Q61) If there is a provision (RDD) against the debtors, such debtors are transferred to the Realisation A/c at Show Answer

Q62) The amalgamation requires approval of____ Show Answer

Q63) The scheme of amalgamation can involve___ companies Show Answer

Q64) Realisation Expenses paid and borne by purchasing company are debited in its books to _____ A/c Show Answer

Q65) Transferee company as per AS14 is______ Show Answer

Q66) In ____ Reconstruction an existing company incurring losses for long time is taken ones by new company Show Answer

Q67) Pooling of Interest is a method that affects ______ Show Answer

Q68) If shares taken over value is more than the purchase consideration then surplus arising in merger is transferred to Show Answer

Q69) Approval by _____ of shareholders is necesssary for treatment as in nature of merger. Show Answer

Q70) On merger, vendor companies are ____ Show Answer

Q71) The ICAI has introduced AS 14 on 'Accounting for Amalgamations'. The standard recognises. Show Answer

Q72) The term 'amalgamation' contemplates ___. Show Answer

Q73) Accounting for absorption is governed by _____. Show Answer

Q74) In merger, excess payment is shown in balance of new company under: Show Answer

Q75) For accounting mergers, the method followed is _____ Show Answer

Q76) Which of the following are not statutory reserve Show Answer

Q77) As per AS 14, purchase consideration is the amount agreed payable to Show Answer

Q78) As per Companies Act 2013, _____ Show Answer

Q79) At the time of amalgamation, purchase consideration does not include: Show Answer

Q80) On amalgamation , accounting for amalgamation in the books of purchasing company is ____. Show Answer

Q81) In which of the following methods, the purchase consideration is calculated on the basis of the agreed value of the shares of the both companies? Show Answer

Q82) The adjustment passed to eliminate the inter company bills of exchange is Show Answer

Q83) As per AS14, payment of expenses on amalgamation _____. Show Answer

Q84) Accounting for amalgamation in the books of a vendor company is ____. Show Answer

Q85) The common feature in merger, purchase of business is _____. Show Answer

Q86) Amalgamation Adjustment A/c is required in respect of ______. Show Answer

Q87) In purchase method all assets are taken over by purchasing company. Show Answer

Q88) In merger method all liabilities must be taken over by purchasing company. Show Answer

Q89) In vendor company in Realisation A/c assets and liabilities taken over shall be considered as book value. Show Answer

Q90) When agreed value of goodwill is provided , purchase consideration shall be based on net payment method. Show Answer

Q91) In net payment method securities of purchasing company shall be considered at issue price or paid up value or face value. Show Answer

Q92) Vendor company securities shall always be redeemed at par. Show Answer

Q93) Amount paid to debenture holders can not be part of purchase consideration. Show Answer

Q94) Arrears of dividend paid in vendor company shall be debited to pref shareholders A/c. Show Answer

Q95) While closing pref shareholders A/c difference is transfer to equity shareholder A/c. Show Answer

Q96) Paid up capital can never exceed authorised capital of the company. Show Answer

Q97) In purchase method balance figure of purchase consideration is considered as goodwill or capital reserve. Show Answer

Q98) In merger method entire excess balance can be transferred to general reserve A/c. Show Answer

Q99) When equity shareholders are closed balance amount shall be recorded as received or paid to equity shareholders. Show Answer

Q100) In amalgamation capital reserve relating to one company can be set off against goodwill of other company. Show Answer

Q101) Amalgamation adjustment A/c entry is recorded only in merger method. Show Answer

Q102) In merger method statutory reserve of vendor company are automatically transferred to purchasing company. Show Answer

Q103) Stock reserve value is recorded as reserve&surplus of the company. Show Answer

Q104) Pref shareholder carrying different dividend rates can be merged together in balance sheet of purchase company. Show Answer

Q105) Amalgamation adjust A/c in the balance sheet is recorded as intangible assets. Show Answer