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 

  1. By the vendor company
  2. By the purchasing company
  3. By the third party

Answer: 2

Q2.  At the time of amalgamation, purchase consideration does not include

  1. The sum which the transferee company will directly pay to the creditors of the transferor company
  2. Payments made in the form of assets by the transferee company to the shareholders of the transferor company
  3. 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

  1. Shareholders 
  2. Shareholders, debenture holders and creditors
  3. Shareholders and debenture holders

Answer: 1

Q4.  Amalgamation Adjustment Reserve is presented in the financial statements of the transferee company as

  1. Other current assets
  2. Separate line item with a negative sign under the head ‘Reserves and Surplus’.
  3. Other non-current assets.

Answer: 2

Q5.  A company into which the vendor company is merged is called

  1. Transferee company
  2. Transferor company
  3. 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. 

  1. Goodwill 
  2. Capital Reserve.
  3. Profit/loss.

Answer: 1


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