( Best 40+ ) Accounting for Amalgamation Absorption and External MCQ

by Mr. DJ

Accounting for Amalgamation Absorption and External MCQ

Table of Contents

Accounting for Amalgamation Absorption and External MCQ

Accounting for Amalgamation Absorption and External MCQ

21. 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

22. 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

23. 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

24. 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

25. 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

26. 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%

27. As per AS–14 purchase consideration is what is payable to

A. Shareholders

B. Creditors

C. Debenture holders

D. Shareholders and Debenture holders.

28. 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

29. ……………….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

30. In absorption there is one ……………………and no formation.

A. Merger

B. Liquidation.

C. Demerger

D. Formation

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