Company Accounts

Questions

1 Share allotment account is a --.

A Real account

B Nominal account

C Impersonal account

D personal account

2 The minimum share Application money is --.

A 10% of the issue price of shares

B Re. 1 per share

C 15% of the face value of shares

D 5% of the face value of shares

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

A for distribution of dividend

B for the issue of bonus shares

C for writing of preliminary expenses

D for providing premium payable on redemption

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

A Share allotment account

B Share forfeited account

C Share first call account

D Share premium account

5 In case of public limited company, after getting the......the company can start the business

A Memorandum of Association

B Table A

C Certificate of commencement of business

D Articles of Association

6 Trade Payables are recorded in................

A Asset side of B/S

B P & L a/c

C Liability side of B/S

D None ofthe above

7 The shares received from the new company is recorded at

A Market value

B Face value

C Average price

D None of these

8 The original amount of preference share capital should be transferred to ............ account in the time
of amalgamation in the books of vendor co.

A Capital Reserve Account

B Equity share capital Account

C Equity share capital Account

D Preference shareholders Account

9 While calculating purchase consideration values of assets is to be considered.

A Book value

B Average price

C Revalued price

D None of the above

10 Net Assets minus Capital Reserve is

A Purchase consideration

B Goodwill

C Total assets

D None of these

11 When the purchasing company does not take over a particular liability and the vendor company pays
that liability, it will debit it to

A Realisation Account

B Bank Account

C Liability Account

D None of the above

12 When the purchasing company bears the liquidation expenses, it will debit the expenses to

A Vendor Company‘s Account

B Bank Account

C Goodwill Account

D None of the above

13 In amalgamation of two companies

A Both companies lose their existence

B Both companies continue

C Any one company continues

D None of the above

14 When purchasing company pays purchase consideration, it will be debited to

A Liquidator of selling company’s account

B Business purchase account

C Assets account

D None of the above

15 When the Vendor (seller) company agrees to bear liquidation expenses, it will debit

A Bank Account

B Goodwill Account

C Realisation Account

D None of the above

16 In case of , one existing company takes over the business of another company and no new company
is formed.

A Absorption

B Amalgamation

C Reconstruction

D None of the Above

17 If amalgamation is in the , the General Reserve or Profit and Loss A/c balance will not be shown in the
balance sheet.

A Form of Merger

B Form of purchase

C Net assets method

D Consideration method

18 Holders of preference shares will have a right to vote if the dividend remains in arrears for a period
not lessthan

A 6 years

B 3 years

C 2 year

D None of the above

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

A liability side of the balance sheet

B asset side of the balance sheet

C credit side of the P&L a/c.

D debit side of the P & L a/c

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

A distribution of dividend

B capital losses

C writing of

D transferring to general reserve

12

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