402a - Corporate Accounting - I PDF

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SEMESTER-IV
CORE: CORPORATE ACCOUNTING-I - 402A
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 for---------.

A. For the issue of bonus shares
B. For writing off preliminary expenses
C. For providing premium payable on redemption
D. For distribution of dividend
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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. Certificate of Incorporation
C. Certificate of commencement of business
D. Articles of Association
ANSWER: C
14. The amount of capital mentioned in MOA is ----------.

A. Authorised capital
B. Issued capital
C. Reserve capital
D. Subscribed capital
ANSWER: A
15. The difference between called up capital and paid up capital is --------------.
A. Issued capital
B. Unpaid capital
C. Reserve capital
D. Uncalled capital
ANSWER: B
16. When the shares are issued to purchase the fixed asset, -------------should be credited.
A. Asset a/c
B. Share premium a/c
C. Share capital a/c
D. Share allotment a/c
ANSWER: C
17. According to companies Act-----------% of interest is to be paid on calls in arrears.

A. 3
B. 4
C. 5
D. 6
ANSWER: C
18. According to Companies Act-------------% of interest is to be paid on calls in advance.

A. 5
B. 6
C. 7
D. 9
ANSWER: B
19. Interest on calls in arrears is transferred to -------------.

A. Debit side of p&L a/c.
B. Credit side of P&L a/c
C. Liability side
D. Asset side
ANSWER: B
20. Interest on calls in advance is transferred to -------------.

A. Debit side of p&L a/c.
B. Credit side of P&L a/c
C. Liability side
D. Asset side
ANSWER: A
21. The rate of discount on shares cannot exceed------------.

A. 5%
B. 10%
C. 12%
D. 15%
ANSWER: B

22. Discount on issue of shares is shown on---------.

A. Asset side of the balance Sheet
B. Liability side of the balance sheet
C. Debit side of the profit and loss account
D. Credit side of the profit and loss account
ANSWER: A
23. Discount of issue of shares is a ---------.

A. Revenue loss
B. Capital loss
C. Deferred revenue expenditure
D. Direct expenses
ANSWER: B
24. When shares are forfeited, the share capital account is debited by--------------.
A. Paid up capital
B. Called-up capital
C. Calls in arrears
D. Issue price of shares
ANSWER: B
25. Discount on issue of forfeited shares should not exceed----------------.

A. 5% od subscribed capital
B. 10% of reissued capital
C. the amount received so far on forfeited shares
D. 25% of original issue price.
ANSWER: C
26. The profit on reissue of forfeited shares is transferred to----------------.

A. General reserve
B. Capital redemption reserve
C. Capital reserve
D. Profit and loss account
ANSWER: C
27. If a share of Rs. 10, on which Rs. 8 has been called and Rs. 5 has been received is forfeited share capital
account in this case will be debited with---------.
A. Rs. 2
B. Rs. 5
C. Rs. 8
D. Rs.10
ANSWER: C
28. Rights shares are those shares which are-----------.

A. Issued by a newly formed company
B. First offered to the existing share holders.
C. Issued to the directors of the company
D. Issued to holders of convertible debentures
ANSWER: B
29. Real owners of a company are called as-------------.

A. Equity shareholders
B. Preference shareholders
C. Debenture holders
D. Bond holders
ANSWER: A
30. Preference share holders receive--------------.

A. Fixed rate of interest
B. Flexible rate of interest
C. Fixed rate of dividend
D. Flexible rate of dividend
ANSWER: C
31. A call money on shares should not exceed -------------of the face value of shares.
A. 1/9
B. 1/7
C. 1/5
D. 1/4
ANSWER: D
32. A new company cannot issue shares at --------------.

A. Premium
B. Discount
C. Par
D. None
ANSWER: B
33. Indian companies cannot issue-------------shares.

A. Equity
B. Preference
C. Sweat equity
D. Deferred
ANSWER: D
34. When shares are issued to promoters for their services,-----------is to be debited.
A. Bank account
B. Promoter account
C. Goodwill account
D. Discount account
ANSWER: C
35. Redeemable preference shares can be redeemed out of ------------------.

A. Amount realized on sale of investments
B. Divisible profits otherwise available for dividend
C. Proceed of fresh issue of shares
D. Both B and C
ANSWER: D
36. Only --------------shares can be redeemed.

A. fully paid preference shares
B. partly paid shares
C. equity shares
D. irredeemable preference shares
ANSWER: A
37. Securities premium account is shown under ------------head.

A. capital
B. Reserves and surplus

C. long term loan
D. current provision
ANSWER: B
38. ----------------can be utilized to issue bonus shares.

A. P & L a/c
B. General reserve
C. Capital redemption reserve
D. All the above
ANSWER: D
39. Which section of the companies Act 1956 provides for the issue and redemption of preference shares?
A. Section 76
B. Section 75
C. Section 77
D. Section 78
ANSWER: D
40. The company intends to issue one right share for every four shares. Market price of the share is Rs. 120.
Right issue price is Rs. 95. Value of right is ---------------.
A. Rs. 20
B. Rs. 25
C. Rs. 30
D. Rs. 40
ANSWER: B
41. The amount on shares paid by share holders before it is actually due is-------------------.
A. calls in arrears.
B. calls in advance
C. reserve capital
D. Subscribed capital
ANSWER: B
42. The amount on shares not paid by share holders after it has been called by the company is--------------.
A. calls in arrears
B. calls in advance
C. reserve capital
D. subscribed capital
ANSWER: A
43. Minimum subscription decided by------------.

A. Share holders
B. Board of Directors
C. Debenture holders
D. Creditors
ANSWER: B
44. When shares are forfeited, the amount already received is----------------.
A. refunded
B. treated as revenue profit
C. retained by company
D. distributed as dividend
ANSWER: C
45. Dividend is paid on ------------.

A. issue price
B. market price
C. face value
D. paid up amount on shares
ANSWER: D
46. If proposed dividend is 18% of the paid up capital, the percentage of profit transferred to reserve is---------
--.
A. 2.5%
B. 5%
C. 7.5%
D. 10%
ANSWER: D
47. When two or more companies going to liquidation and new company is formed then it is known as---------
-----.
A. Absorption
B. Amalgamation
C. Internal reconstruction
D. External reconstruction
ANSWER: B
48. Preference dividend is to be paid before-----------.

A. payment of debenture interest
B. payment of income tax
C. distribution of equity dividend
D. all the above
ANSWER: C
49. 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-------------.
A. absorption
B. amalgamation
C. internal reconstruction
D. external reconstruction
ANSWER: C
50. When an existing company takes over the business of one or more existing companies, it is called
A. amalgamation
B. absorption
C. reconstruction
D. none of the above
ANSWER: B
51. 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.
A. goodwill account
B. capital reserve account
C. goodwill and capital account
ANSWER: C

52. Accumulated losses in the vendor company should be transferred to------------.

A. Share capital account
B. equity shareholders account
C. capital reserve account
D. profit and loss account
ANSWER: B
53. Post acquisition profits are treated as---------------.

A. Revenue profit
B. capital profit
C. capital reserve
D. revenue reserve
ANSWER: A
54. Company can issue redeemable preference shares which are redeemable within--------------.
A. 10 years from the date of issue.
B. 5 years from the date of issue
C. 7 years from the date of issue
D. 2 years from the date of issue.
ANSWER: B
55. In what form is the profits of the company are distributed amongst the shareholders?
A. shares
B. premium from issue of share
C. reserves
D. dividend
ANSWER: D
56. The dividend that is declared between AGM is------------.

A. Interim dividend
B. final dividend
C. semi dividend
D. half-yearly dividend
ANSWER: A
57. The total remuneration payable to the managerial personnel should not exceed----------net profits.
A. 5%
B. 10%
C. 11%
D. 15%
ANSWER: C
58. Private limited company has minimum--------------.

A. 2 directors
B. 5 directors
C. 10 directors
D. 20 directors
ANSWER: A
59. Forfeited shares to become-------------.

A. property of the government.
B. property of the company
C. property of the shareholders
D. property of all the shareholders
ANSWER: B
60. Purchase consideration is payable in-------------.

A. cash
B. shares
C. debentures
D. any one of the above or all of the above
ANSWER: D
61. Realisation expenses met by the purchasing company should be debited to-------------.
A. realisation account
B. goodwill account
C. vendor account
D. capital reserve account
ANSWER: C
62. The excess of purchase consideration over net asset is--------------.

A. securities premium
B. capital reserve
C. goodwill
D. preliminary expenses
ANSWER: C
63. Profit prior to incorporation is the profit earned----------------.

A. between the date of incorporation and the date of commencement of business.
B. between the date of purchase and date of incorporation
C. between the date of incorporation and date of receipt of commencement of business.
D. between the date of purchase of business and date of commencement of business.
ANSWER: B
64. Profit prior to incorporation belongs to ---------------.

A. the company
B. the vendor
C. both the company and the vendor
ANSWER: A
65. Profit prior to incorporation should be credited to---------------.

A. goodwill account
B. revenue reserve account
ANSWER: C
66. Loss prior to incorporation should be debited to-----------------.

A. revenue reserve
B. goodwill account
D. preliminary expenses account
ANSWER: B
67. Gross profit is to be apportioned between pre and post incorporation periods in-----------------.
A. Time ratio
B. adjusted time ratio
C. sales ratio
ANSWER: C
68. Bade debts recovered which was written off before purchase of business should be-----------.
A. divided in time ratio
B. divided in sales ratio
C. posted in pre - incorporation period
D. Posted in post incorporation period
ANSWER: C
69. Audit fees should be divided between pre and post incorporation periods in---------.
A. time ratio
B. time ratio or posted only in post- incorporation period.
C. Sales ratio
D. adjusted time ratio
ANSWER: A
70. The salary paid to manager, for a period before acquisition of business, should be---------.
A. divided time ratio
B. posted in pre - incorporation period
C. posted in post- incorporation period
D. divided in adjusted time ratio.
ANSWER: B
71. Interest-paid to vendor should be divided between pre and post incorporation periods in --------.
A. adjusted time ratio
B. time ratio
C. Sales ratio
D. None of the above
ANSWER: A
72. Discount received from creditors and carriage inwards should be divided between pre and post
incorporation periods in----------------.
A. Sales ratio
B. purchase ratio
C. adjusted time ratio
D. None of the above.
ANSWER: A
73. In the balance sheet of a limited company, assets are arranged in the order of---------------.
A. liquidity
B. permanence
C. neither of the two
D. either liquidity or permanence.
ANSWER: B
74. Advance payment of tax is in the nature of -----------.

A. capital expenses
B. revenue expenses
C. pre-paid expenses
D. outstanding expenses
ANSWER: C

75. In the liabilities side of the company's balance sheet, calls in arrears are shown------------.
A. Under the heading Reserves and Surplus.
B. Under the heading current liabilities
C. Under the heading Secured loans
D. By subtracting the amount from the called up capital.
ANSWER: D
76. In the asset side of the company's balance sheet, fictitious asset like Discount on issue of debentures are
shown under the heading
A. fixed assets
B. investments
C. current assets
D. miscellaneous expenditure
ANSWER: D
77. Preliminary expenses are an example of---------------------

A. fixed assets
B. current assets
C. fictitious asset.
D. investment
ANSWER: C
78. Debentures are shown in the balance sheet under the heading
A. unsecured loans
B. current liabilities
C. secured loans
D. share capital
ANSWER: C
79. Interest on debenture is----------.

A. variable in nature
B. fixed in nature
C. optional
D. appropriation.
ANSWER: B
80. Profit on cancellation of own debentures are transferred to--------------.

A. P&L a/c
B. capital reserve
C. general reserve
D. dividend equalization fund
ANSWER: B
81. The maximum remuneration payable to a part time director (without managing director(s) or whole time
director(s), or manager) should not exceed-----------------.
A. 1% of the annual profit
B. 3% of the annual profits
C. 5% of the annual profits
D. 10% of the annual profits
ANSWER: C
82. Interest on debentures is calculated on-------------.

A. Issue price
B. Redeemable price
C. Face value
D. Market price
ANSWER: C
83. Own debentures account (at the time of purchase of own debentures) is always debited with
A. the fair value
B. the cum-interest price
C. the ex-interest price
D. face value
ANSWER: C
84. The balance of sinking fund investment account after the realization of investment is transferred to ---------
-----.
A. P&L account
B. Debentures account
C. sinking fund account
D. general reserve account
ANSWER: C
85. When debentures of Rs. 100 is issued for Rs. 95 and it is redeemable at Rs.5 premium, the amount which
should be debited to loss on redemption of debenture account is --------------.
A. Rs. 5
B. Rs. 10
C. Rs. 95
D. Rs. 100
ANSWER: A
86. A company has issued capital of Rs. 40,000 equity shares of Rs. 10 each fully paid. It decides to convert
its capital into 80,000 equity shares of Rs. 5 each. It is case of--------------.
A. Decrease in unissued capital
B. sub-division of share capital
C. Consolidation of share capital
ANSWER: B
87. Accounting standard for Amalgamation is-------------------.

A. AS-8
B. AS-20
C. AS-14
D. AS-3
ANSWER: C
88. Pooling of interests method is used to account for amalgamation in the nature of ---------------.
A. purchase
B. sale
C. merger
ANSWER: A
89. Purchase consideration AS-14, should include cash and securities agreed to be given by the transferee
company to transferor company's ---------------.
A. shareholders
B. shareholders & debenture holders
C. creditors, debenture holders and shareholders.

ANSWER: A
90. Expenses of liquidation of transferor company may be shown as 'Reimbursement' in transferor company's
books, if the expenses are agreed to paid by------------.
A. transferor company
B. transferee company
C. both the companies
D. neither company
ANSWER: B
91. 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 -------------.
A. 2 years
B. 8 years
C. 20 years
D. 5 years
ANSWER: D
92. The price payable by a company for business acquired is known as-------------.
A. purchase consideration
B. net worth
C. net asset
D. lump sum
ANSWER: A
93. If the net tangible assets exceeds the purchase consideration, the difference will be treated as---------------.
A. goodwill
B. capital reserve
C. acquisition cost
D. capital redemption reserve
ANSWER: B
94. When shares or debentures are issued at a premium ------------account should be credited with the amount
of the premium.
A. Share premium
B. securities premium
C. premium
D. profit on issue of shares
ANSWER: B
95. The profit made on acquisition of business is credited to------------.

A. P&L account
B. P&L appropriation account
D. Goodwill account
ANSWER: C
96. Rent is divided in the ratio while calculating pre- incorporated profit.
A. time ratio
B. sales ratio
C. adjusted time ratio
D. purchase ratio
ANSWER: A
97. Loss prior top incorporation is to be shown in the assets side of the balance sheet under the heading---------
-------.
A. fixed assets
B. loans and advances
C. current assets
D. Miscellaneous expenses
ANSWER: D
98. Final accounts of a company include-----------------------.

A. P&L account and Balance sheet
B. P&L account and P&L appropriation account
C. Trading, P&L account, P&L appropriation account
D. Trading, P&L account, P&L appropriation account and Balance Sheet
ANSWER: D
99. Loose tools is shown in the balance sheet under the head---------------.
A. fixed assets
B. loans and advances
C. current assets
D. Miscellaneous assets
ANSWER: A
100. The surplus found in P&L appropriation account is shown under the head--------------------.
A. share capital
B. Reserves and surplus
C. current liabilities
D. current provision.
ANSWER: B
101. -----------section of the Companies Act provides the power of issuing debentures.
A. 293
B. 292(1)
C. 295
D. 287
ANSWER: B
102. Dentures can be issued ----------------.

A. for cash consideration only
B. for other than cash consideration only.
C. as collateral securities
D. either for cash or for other than cash or as collateral
ANSWER: D
103. Discount and loss on issue of debentures are shown under ---------------.
A. Current liabilities
B. fixed assets
C. reserves and surplus
D. miscellaneous expenditure
ANSWER: D
104. When debentures are redeemed out of profits, the profit equivalent to the debenture is transferred to ------
------.
A. sinking fund
B. debenture redemption fund

C. debenture
D. debenture holders
ANSWER: B
105. If the quoted price includes the interest on the debenture form the previous interest to till the date of sale,
the price is-------------
A. ex-interest price
B. cum-interest price
C. interest free price
D. whole sale price
ANSWER: B
106. If the quoted price does not include the interest on debenture from the previous interest to till the date of
sale, the price is-----------.
A. ex-interest price
B. cum-interest price
C. interest free price
D. whole sale price
ANSWER: A
107. Sinking fund can be created out of------------------.

A. revenue profit
B. capital profit
C. premium
D. capital redemption reserve
ANSWER: A
108. Debentures represent the------------------.

A. Manager's share in the business
B. investment by shareholders in business
C. long term borrowings of a business
D. trade creditors
ANSWER: C
109. Debenture holders are the ---------------------. company

A. creditors
B. owners
C. borrowers
D. customers
ANSWER: A
110. In case of internal reconstruction the existing company will be------------.

A. liquidated
B. Amalgamated
C. Absorbed
ANSWER: D
111. Increases in the value of fixed assets at the time of reconstruction will be credited to ------------------.
A. Capital reserve account
B. Share capital account
C. General Reserve account
D. Capital reduction account
ANSWER: A
112. Decrease of liability at the time of internal reconstruction----------.

A. Equity share capital
B. capital reduction
C. capital reserve
D. preference share capital
ANSWER: B
113. At the time of reorganisation the amount of shares surrounded by shareholder is transferred to--------------
-.
A. Capital reserve account
B. capital reduction account
C. general reserve account
D. surrendered share account
ANSWER: D
114. For writing off the accumulated losses under the scheme of capital reduction we debit--------------------.
A. share capital account
B. capital reserve account
C. general reserve account
D. Accumulated loss account
ANSWER: A
115. In case of consolidation of share capital the total number of shares of the company-------------.
A. Decreases
B. Increases
C. Equal
ANSWER: C
116. When uncalled amount of share capital is to be reduced then the amount of paid up capital of the
company is called--------------.
A. stock
B. Does not change
C. advances
D. arrears
ANSWER: D
117. To carry out the scheme of capital reduction ----------------approval is necessary.

A. court
B. central government
C. Company Law Board
D. registrars of company
ANSWER: C
118. If the creditors are willing, their claim against the company-------------be reduced.
A. Income
B. capital
C. cannot
D. interest
ANSWER: D
119. Reserves of the company -----------------be utilised in meeting the accumulated losses at the time of
internal reconstruction.
A. can
B. cannot
C. may be
ANSWER: A
120. The various losses can be written with the help of capital reduction account at the time of--------------
reconstruction.
A. External
B. outsources
C. Internal
D. Surplus
ANSWER: A
121. The amount of surrendered shares is credited to --------------account

A. capital reduction
B. capital
C. bank
D. P&L
ANSWER: C
122. Alteration of share capital is effected by a company if it is authorized by the-------------------------.

A. Memorandum of Association
B. Articles of association
C. shareholders
D. Board of directors
ANSWER: A
123. The capital reduction scheme can be implemented only after getting permission from-------------.
A. Central government
B. controller of capital issues
C. share holders
D. the competent court.
ANSWER: C
124. Any decreases in the value of assets at the time of internal reconstruction, will be changed to-------------.
A. Goodwill a/c
B. capital reduction a/c
C. Revaluation a/c
D. share capital a/c
ANSWER: B
125. Consolidation of shares does not affect the amount of----------------.

A. Share capital
B. creditors
C. Debtors
D. Bank overdraft
ANSWER: A
126. A company can convert fully paid ---------------into stock and also reconvert ----------------back into
shares
A. securities,Debentures
B. Debentures,deposits
C. Deposits,securities
D. share,stock
ANSWER: D
127. Any debit balance in P&L a/c represents ------------and such losses will be written off as part of capital
reorganization.
A. Gains
B. resources
C. accumulated losses
D. Incomes
ANSWER: C
128. In the scheme of capital reduction, any new liability to be provided for, such as arrears of preference
dividend, must be met out of-----------account.
A. income reduction
B. trading
C. capital reduction
D. debtors
ANSWER: C
129. Inter company 'owing' should be -------------while preparing the balance sheet of the transferee company
after completion of amalgamation.
A. eliminated
B. not eliminated
C. appointed
D. none of the above.
ANSWER: A
130. When surrendered shares are reissued -------------------is debited.

A. surrendered shares account
B. preference share capital
C. Bank account
D. capital reduction account
ANSWER: A
131. For refunding surplus capital-----------------is credited.

A. share holders a/c
B. creditors a/c
C. Liabilities a/c
D. share holders a/c
ANSWER: D
132. For any sacrifice made by debenture holders or creditors--------------is credited.

A. capital reduction account
B. Bank account
D. Asset account
ANSWER: A
133. For transferring assets to realisation a/c-------------------is debited.

A. purchasing a/c
B. Liabilities a/c
C. Preference share capital a/c
D. realisation a/c
ANSWER: D
134. For transferring liabilities taken over ---------------is debited.

A. Assets a/c
B. Realisation a/c
C. Liabilities a/c
ANSWER: C
135. For purchase consideration receivable----------------is debited

A. Purchasing company's account
B. Bank a/c
C. Purchasing a/c
D. Debenture a/c
ANSWER: A
136. For receiving the purchase consideration ----------------is credited

A. Liability account
B. Purchasing company's account
C. Realisation account
D. Bank account
ANSWER: B
137. For realizing assets not taken over ----------------is debited

A. creditors a/c
B. Bank a/c
C. Debenture a/c
D. share holders a/c
ANSWER: B
138. For payment of liabilities not taken over ---------------is debited.

A. Purchasing company's a/c
B. Debenture holders a/c
C. Realization a/c
D. shares in purchasing a/c
ANSWER: C
139. If expenses are to be borne by the purchasing company -----------is debited

A. Purchasing company's a/c
B. P&L a/c
C. preference share holders a/c
D. Equity share holders a/c
ANSWER: A
140. For discharge of preference share capital--------------is debited.

A. shares in purchasing a/c
B. preference share capital
C. realization
D. Debenture
ANSWER: B
141. For realization profit and loss account ---------------is credited.

A. Equity share holders a/c
B. Bank a/c
C. Preference share capital

ANSWER: A
142. For final payment to the equity share holders ----------------is debited.
A. Debenture holders account
B. Bank account
C. preliminary expenses account
ANSWER: B
143. When two or more companies liquidate to form a new company is called-----------------.
A. Amalgamation
B. Absorption
C. Reconstruction
ANSWER: A
144. When the purchasing company allots shares at market price the calculation of purchase consideration is
based on-----------------.
A. Market price
B. Paid up value
C. Average of the above two
ANSWER: A
145. Liquidation expenses paid by the purchasing company are to be debited to ------------------.
A. Preliminary expenses account
B. Business purchase account
C. Recreation expenses
ANSWER: D
146. Absorption is said to be taken place when--------------------.

A. A Company is formed to take over the other company.
B. Two or more companies are liquidated to form a new company.
C. Two or more companies liquidate to be taken over by the existing company.
ANSWER: A
147. X Ltd takes over the net assets of Y Ltd valued at Rs. 8,00,000 and agrees to pay Rs. 5,00,000 to equity
share holders Rs. 2,00,000 to preference share holders and balance to the debenture holders. The purchase
consideration paid by X Ltd is-----------
A. Rs. 5,00,000
B. Rs. 6,00,000
C. Rs.7,00,000
ANSWER: A
148. X Ltd acquires the business of Y Ltd whose net assets as per the balance sheet work out to Rs. 5,00,000.
X Ltd agrees to pay Rs. 3,50,000 to equity shareholders, Rs. 2,50,000 to preference share holders and Rs.
2,00,000 to debenture holders. The purchase consideration agreed to be paid is-------------------.
A. Rs. 8,00,000
B. Rs. 6,00,000
C. Rs. 5,00,000
D. Rs. 7,00,000
ANSWER: A
149. P Ltd takes over Q Ltd and agrees to allot its shares. The intrinsic values of shares of P Ltd and Q Ltd are
Rs. 10,00,000 and Rs. 100 respectively. The basis of exchange on intrinsic value between P Ltd and Q Ltd
should be-------------------.
A. One share of P Ltd for one share of Q Ltd
B. Two shares of P Ltd for Three shares of Q Ltd
C. Three shares of P Ltd for Two shares of Q Ltd
ANSWER: B
150. When a company converts its equity shares into capital stock then the account to be credited is-------------
-.
A. Equity share capital account
B. Preference share capital account.
C. Equity share stock account.
D. No entry is required.
ANSWER: C
Staff Name
Senthilkumar.L.

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1/24/2020 172.16.1.50/printqp.php?heading=II-B.

COM [2018-2021], SEMESTER-IV, CORE: CORPORATE ACCOUNTING-I - 402A&qname=402a

Dr.G.R.Damodaran College of Science

1. Share allotment account is a ------------------.

2. Share Application account is a---------------.

3. The minimum share Application money is -----------.

4. Premium received on issue of shares is shown on-----------.

5. Premium on issue of shares can be used for -----------.

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

8. When shares issued at premium which of the following account is credited?

9. Minimum number of members in case of public company is---------.

10. Maximum number of members in public limited company is ---------------.

14. The amount of capital mentioned in MOA is ----------.

17. According to companies Act-----------% of interest is to be paid on calls in arrears.

18. According to Companies Act-------------% of interest is to be paid on calls in advance.

19. Interest on calls in arrears is transferred to -------------.

20. Interest on calls in advance is transferred to -------------.

21. The rate of discount on shares cannot exceed------------.

172.16.1.50/printqp.php?heading=II-B.COM [2018-2021], SEMESTER-IV, CORE: CORPORATE ACCOUNTING-I - 402A&qname=402a 3/21

22. Discount on issue of shares is shown on---------.

23. Discount of issue of shares is a ---------.

25. Discount on issue of forfeited shares should not exceed----------------.

26. The profit on reissue of forfeited shares is transferred to----------------.

28. Rights shares are those shares which are-----------.

29. Real owners of a company are called as-------------.

30. Preference share holders receive--------------.

32. A new company cannot issue shares at --------------.

33. Indian companies cannot issue-------------shares.

35. Redeemable preference shares can be redeemed out of ------------------.

36. Only --------------shares can be redeemed.

37. Securities premium account is shown under ------------head.

B. Reserves and surplus

38. ----------------can be utilized to issue bonus shares.

43. Minimum subscription decided by------------.

45. Dividend is paid on ------------.

48. Preference dividend is to be paid before-----------.

172.16.1.50/printqp.php?heading=II-B.COM [2018-2021], SEMESTER-IV, CORE: CORPORATE ACCOUNTING-I - 402A&qname=402a 7/21

52. Accumulated losses in the vendor company should be transferred to------------.

53. Post acquisition profits are treated as---------------.

56. The dividend that is declared between AGM is------------.

58. Private limited company has minimum--------------.

59. Forfeited shares to become-------------.

60. Purchase consideration is payable in-------------.

62. The excess of purchase consideration over net asset is--------------.

63. Profit prior to incorporation is the profit earned----------------.

64. Profit prior to incorporation belongs to ---------------.

65. Profit prior to incorporation should be credited to---------------.

66. Loss prior to incorporation should be debited to-----------------.

74. Advance payment of tax is in the nature of -----------.

172.16.1.50/printqp.php?heading=II-B.COM [2018-2021], SEMESTER-IV, CORE: CORPORATE ACCOUNTING-I - 402A&qname=402a 10/21

77. Preliminary expenses are an example of---------------------

79. Interest on debenture is----------.

80. Profit on cancellation of own debentures are transferred to--------------.

82. Interest on debentures is calculated on-------------.

87. Accounting standard for Amalgamation is-------------------.

D. None of the above

95. The profit made on acquisition of business is credited to------------.

98. Final accounts of a company include-----------------------.

102. Dentures can be issued ----------------.