1. When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as ..................
Correct : A. amalgamation
2. When one of the existing companies take over business of another company or companies, it is known as ...........
Correct : B. absorption
3. While calculating purchase price, the following values of assets are considered
Correct : B. new values fixed
4. Shares received from the new company are recorded at -
Correct : C. market value
5. 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
6. 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
7. The Amalgamation Adjustment Account appears in the books, it is shown under the heading of ......... in the balance sheet.
Correct : D. miscellaneous expenditure
8. 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
9. If the intrinsic values of shares exchanged are not equal, the difference is paid in ...........
Correct : A. cash
10. In case of .............., one existing company takes over the business of another company and no new company is formed