Correct : A. The International Accounting Standards Board
2. International Public Sector Accounting Standards were issued by
Correct : C. International Federation of Accountants.
3. The process of recording financial data up to trial balance is
Correct : A. Book keeping
4. In which of the following cases, accounting estimates are needed?
Correct : D. All of the above
5. The long term assets that have no physical existence but, possess a value is
known as,
Correct : C. Intangible assets
6. Which of these best explains fixed assets?
Correct : A. Are bought to be used in the business.
7. The assets that can be easily converted into cash within a short period (i.e., 1
year or less is known as,
Correct : A. Current assets
8. Which of the following statement is correct?
Correct : C. Goodwill = Net Assets – Purchase price
9. Hitesh Ltd.’s purchase consideration is Rs.12,345 and Net Assets Rs.3,568,
then...........
Correct : A. Goodwill Rs. 8,777
10. If the two companies have different accounting policies in respect of the same item, then they make necessary changes to adopt .............. accounting policies.
Correct : A. Same
11. When two or more companies carrying on similar business decide to combine, a new
company is formed, it is known as…………………………
Correct : B. Amalgamation
12. When one of the existing companies take over business of another company or
companies, it is known as…………………………………
Correct : C. Absorption
13. In case of .............., one existing company takes over the business of another
company and no new company is formed
Correct : C. Absorption
14. While calculating purchase consideration ............... values of assets is to be
considered.
Correct : C. Net
15. Net Assets minus Capital Reserve is………………………
Correct : A. Purchase consideration
16. The original amount of preference share capital should be transferred to ............ account in the time of amalgamation in the books of vendor co.
Correct : B. Preference share holders
17. ………………………………………………..method the amount of depreciation expenses remains same throughout the useful life of a fixed assets
Correct : A. Straight line method
18. Depreciation arise because of………………………..
Correct : B. Normal wear and tear
19. Loss Prior to incorporation is treated as ........... Loss, and Vendor’s Salaries are
chargeable to ................ incorporation period.
Correct : C. Post
20. Which type of asset class includes those assets which have only definite use and
become valueless when the yield is over?
Correct : D. Wasting asset
21. Financial accounting is concerned with –
Correct : C. Recording of day to day business transactions
22. Accounting principles are generally based upon:
Correct : A. Practicability
23. The system of recording based on dual aspect concept is called:
Correct : B. Double entry system
24. Fixed assets and current assets are categorized as per concept of:
Correct : B. Going concern
25. Accounting standards and Standards on Auditing establish standards which have to be complied with to ensure that financial statements are prepared in accordance with ______.
Correct : A. Generally acceptable Audit Procedure
26. Change in accounting estimate is __________
Correct : B. Change in accounting policy
27. Indian accounting standards are the International financial reporting standards converged standards issued by the central government of India under the supervision and control of accounting standards board of ICAI and in consultation with __________.
Correct : B. NFRA
28. Preparation of consolidated Balance Sheet of Holding Co. and its subsidiary
company as per
Correct : A. As 11
29. The share of outsiders in the Net Assets in subsidiary company is known as under :
Correct : D. outsiders liability
30. Pre-acquisition profit in subsidiary company is considered as:
Correct : B. Capital profit
31. Excess of paid up value of the shares over cost of investment is considered as:
Correct : A. Goodwill
32. Profit earned after acquisition of share is treated as
Correct : A. Capital profit
33. Preparation of consolidated statement as per AS 21 is
Correct : B. Mandatory for listed Companies
34. Holding Co. share in revenue profits of subsidiary company is adjusted in :
Correct : C. Profit and loss account
35. Unrealised profit on goods sold and included in stock is deducted from :
Correct : B. Revenue Profit
36. Face value debentures of subsidiary co. held by Holding Company is deducted from
Correct : B. Cost of control
37. Which of the following statement is true:
Correct : A. There is no change in the amount of capital reserve before and after issue of bonus share of the issue is made from out of pre-acquisition profit.
38. Minority Interest includes :
Correct : D. All of the above
39. The Time interval between the date of acquisition of shares in subsidiary company and date of Balance Sheet of Holding Company is known as :
Correct : B. Post-acquisition period
40. Pre-acquisition dividend received by Holding company is credited to
Correct : C. Investment A/c
41. Post Acquisition dividend received by Holding Company is debited to :
Correct : B. profit & loss A/c
42. Which Exchange rate will be considered for conversion of share capital of subsidiary
company.
Correct : D. Rate of which date share acquired (actual)
43. A subsidiary company shall be excluded from consolidation when:
Correct : D. Both a and b.
44. Shares received from the new company are recorded at –
Correct : C. Market value
45. When two or more companies carrying on similar business decide to combine, a new
company is formed, it is known as ..................
Correct : A. Amalgamation
46. When one of the existing companies take over business of another company or
companies, it is known as ...........
Correct : B. Absorption
47. While calculating purchase price, the following values of assets are considered
Correct : B. New values fixed
48. While calculating purchase price, the following values of assets are considered
Correct : C. Average values
49. Which of the following statement is correct?
Correct : A. The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only
50. If the two companies have different accounting policies in respect of the same item,
then they make necessary changes to adopt .............. accounting policies.
Correct : D. Uniform
51. The Amalgamation Adjustment Account appears in the books, it is shown under the
heading of ......... in the balance sheet.
Correct : D. Miscellaneous expenditure
52. If amalgamation is in the ..............., the General Reserve or Profit and Loss A/c
balance will not be shown in the balance sheet.
Correct : B. Form of purchase
53. If the intrinsic values of shares exchanged are not equal, the difference is paid in
...........
Correct : A. Cash
54. In case of .............., one existing company takes over the business of another
company and no new company is formed.
Correct : B. Absorption
55. In amalgamation of two companies
Correct : A. Both companies lose their existence
56. When purchasing company pays purchase consideration, it will be debited to
Correct : C. Liquidator of selling company’s account
57. When the purchasing company bears the liquidation expenses, it will debit the
expenses to
Correct : C. Goodwill Account
58. When the Vendor (seller) company agrees to bear liquidation expenses, it will debit
Correct : A. Realisation Account
59. When the purchasing company does not take over a particular liability and the
vendor company pays that liability, it will debit it to
Correct : A. Realisation Account
60. When the Net Assets are less than the Purchase Consideration, the difference will
be
Correct : A. Debited to Goodwill A/c.
61. While calculating purchase consideration ............... values of assets is to be
considered.
Correct : B. Revalued price
62. Net Assets minus Capital Reserve is _________
Correct : C. Purchase consideration
63. Hitesh Ltd.’s purchase consideration is Rs.12,345 and Net Assets Rs.3,568,
then..........
Correct : A. Goodwill Rs. 8,777
64. The original amount of preference share capital should be transferred to ............
account in the time of amalgamation in the books of vendor co.
Correct : A. Preference shareholders Account
65. The share capital, to the extent already held by the purchasing company, is closed
by the vendor company by crediting it to:
Correct : C. Realisation account.
66. 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:
Correct : B. Shares in the vendor company account
67. The vendor company transfers preliminary expenses (at the time of absorption) to:
Correct : B. Realisation account
68. A Ltd. and B Ltd. go into liquidation and a new company X Ltd. is formed. It is a case of:
Correct : C. Amalgamation.
69. 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.
Correct : B. 90%
70. As per AS–14 purchase consideration is what is payable to
Correct : A. Shareholders
71. In the case of ………………………. only one of the combining companies survives
and the other losses its separate identity.
Correct : A. Acquisition
72. ……………….is the amount payable by the purchasing companies to the vendor
company for taking over the business of vendor company.
Correct : C. Purchase consideration
73. In absorption there is one ……………………and no formation.
Correct : B. Liquidation.
74. In external liquidations, there is one liquidation and one ………………
Correct : A. Formation
75. When two or more companies carrying on similar business decide to combine, a
new company is formed, it is known as ..................
Correct : A. Amalgamation
76. When one of the existing companies take over business of another company or companies, it is known as ...........
Correct : B. Absorption
77. Which of the following statement is correct?
Correct : A. The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only
78. The form of balance sheet is………………..
Correct : C. Horizontal and vertical
79. The term current asset doesn’t cover
Correct : A. Car
80. P&L statement is also known as
Correct : B. Statement of income
81. Which of the following is true about financial statements?
I)Financial statement gives a summary of accounts. II) Financial statements can be stated as recorded facts.
Correct : C. Both I andII
82. The statement of financial position and the balance sheet are synonyms
Correct : A. True
83. Which of the following statements are true?
I) Financial statements are only interim report. II) Financial statements are also known as annual records. III) Financial statements are historic.
Correct : C. Both II and III
84. Certain assumptions are essential to prepare financial statements.
Correct : A. True
85. Premium received on issue of shares cannot be utilised for ---------.
Correct : D. for distribution of dividend.
86. In case of public limited company, after getting the-----------the company can start
the business
Correct : C. Certificate of commencement of business
87. Trade Payables are recorded in………………….
Correct : A. Current Liabilities
88. In company Final Accounts Goodwill is shown under……………
Correct : C. Fixed Assets
89. Dividend is payable on the amount of…………………………..
Correct : A. Profit
90. The dividend paid between two annual general meeting is known
a……………………….
Correct : C. Interim Dividend
91. Unclaimed dividend recorded on the…………………….. the balance sheet.
Correct : A. Liability
92. A liability which can be measured only by using a substantial degree of estimation is
called……………………….
Correct : A. Contingent liabilities
93. Unquoted shares means……………………….
Correct : D. Unlisted Shares
94. Bills receivable is ……………………..assets.
Correct : A. Current
95. The amount of profit kept a side to maintain uniform rate of dividend is
called………………
Correct : C. Undistributed Dividend
96. Director’s remuneration shall not exceed ………………. % of the net profits.
Correct : A. 10%
97. Voluntary winding up:
Correct : D. All of the above
98. Compulsory winding up:
Correct : D. All of the above.
99. The first item in order of payment to be made by liquidator is:
Correct : C. Liquidation expenses
100. Liquidator’s statement of receipts and payment is know as:
Correct : C. Liquidator’s final statement of account