MCQ for CA Intermediate Adv. Accounts - Chapter 5 - AMALGAMATION OF COMPANIES
Sample Multiple Choice Questions (MCQ's) for CA Intermediate - Paper 5 - ADVANCED ACCOUNTING - Chapter 5: AMALGAMATION OF COMPANIES - For Practice relevant for May/November 23 Examinations
Q1. In case of amalgamation, the entry for elimination of unrealized profit or loss on stock is made
- By the vendor company
- By the purchasing company
- By the third party
Answer: 2
Q2. At the time of amalgamation, purchase consideration does not include
- The sum which the transferee company will directly pay to the creditors of the transferor company
- Payments made in the form of assets by the transferee company to the shareholders of the transferor company
- Preference shares issued by the transferee company to the preference shareholders of the transferor company
Answer: 1
Q3. As per AS 14, purchase consideration is the amount agreed payable to
- Shareholders
- Shareholders, debenture holders and creditors
- Shareholders and debenture holders
Answer: 1
Q4. Amalgamation Adjustment Reserve is presented in the financial statements of the transferee company as
- Other current assets
- Separate line item with a negative sign under the head ‘Reserves and Surplus’.
- Other non-current assets.
Answer: 2
Q5. A company into which the vendor company is merged is called
- Transferee company
- Transferor company
- Selling company.
Answer: 1
Q6. If the purchase consideration is more than net assets (at agreed values) of the transferor company, difference shall be recorded as __________ in the books of the transferee company.
- Goodwill
- Capital Reserve.
- Profit/loss.
Answer: 1
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