T.Y B.COM
SEMESTER - 5
MID SEMESTER EXAMINATION
ADVANCED ACCOUNTING
MCQS = SEPTEMBER - 2017
1. With reference to consolidated financial statements, a group means
A. A parent
B. All subsidiaries
C. A parent and all its subsidiaries
D. None of A, B and C
2. In Amalgamation of companies, under the "purchase method of accounting" the
transferee company incorporate in its books _______________.
A. The assets, liabilities and statutory reserves of the transferor company
B. The assets, liabilities and non-statutory reserves of the transferor company
C. The assets, liabilities and reserves of the transferor company
D. The assets and liabilities of the transferor company
3. A company has issued capital of 10,000 equity shares of Rs. 10 each fully paid. It decides to convert its capital into 20,000 equity shares of Rs. 5 each. It is a case of ___________.
A. Conversion of shares into stock
B. Sub-division of share capital
C. Conversion of stock into shares
D. Consolidation of share capital
4. In case of amalgamation in the nature of merger, liquidation expenses of the transferor company borne by the transferee company are debited to ________
A. Profit & loss account
B. Goodwill account
C. Realization account
D. None of A,B and C
5. Holding company valued plant of subsidiary company at Rs 3,00,000 on date of acquisition i.e. on 01/10/2016. The effect of same has not been given in the books of subsidiary company. Subsidiary company charges depreciation. @ 10% p. a. on opening value of plant. Closing value of plant as per Balance Sheet as on March 31, 2017 is Rs 2,61,000. Additional depreciation to be charged would be:
A. Rs 600
B. Rs 500.
C. Rs 700
D. Rs 400
6. On July 01, 2016, H Ltd. acquired 12,000 equity shares of S Ltd. for a consideration of Rs.15,00,000. The share capital of S Ltd. consists of 15,000 equity shares of Rs. 100 each. The balances of General reserve and Profit and loss account of S Ltd. are as under:
|
6 Particulars |
6 As on July 01,2016 |
6 As on March 31,2017 (RS.) |
|
General Reserve |
2,40,000 |
3,00,000 |
|
Profit and loss account |
2,00,000 |
2,50,000 |
The amount of minority interest shown in the Consolidated Balance Sheet as on
March 31, 2017 is
A. Rs.4,60.000
B. Rs.4,10,000
C. Rs.5,12,500
D. None of A, B and C
7. H Ltd. acquired 80% equity shares of S Ltd on April 1, 2016 at a price of Rs.5,00,000. "The share capital of S Ltd. consists of 5,000 shares of Rs. 100 each. If the share of capital profits and revenue profits of H Ltd in S Ltd. are Rs. 1,28,000 and Rs.1,08,000 respectively. The cost of control of H Ltd in S Ltd is ___________
A. Rs.1,36,000 (Goodwill)
B. Rs. 28,000 (Capital Reserve)
C. Rs. 28,000 (Goodwill)
D. None of A, B and C
8. The Share Capital of S Ltd. consists of 75,000 equity shares of Rs. 10 each fully paid. On 01.10.2016, I Ltd. acquired 60,000 shares in S Ltd. at a premium of RS.2 per share. The ratio of holding and time ratio is:
A. 4:1,1:1
B. 1:1,1:1
C. 1:4, 1:1
D. None of A, B and C
9. ABC Ltd has sundry creditors of Rs.2,50,000. As a part of internal reconstruction scheme the sundry creditors agreed to waive 40% of their claim & to accept equity shares of Rs.50,000 of their renewed claim in part settlement. The sundry creditors would be shown in the balance sheet after reconstruction of the company at Rs. ________
A. Rs. 1,50,000
C. Rs. 1,00,000
B. Rs. 2,00,000
D. Nil
10. The closing balance of building is Rs. 3,15,000 as on 31.3.2017 after charging 10 % depreciation by subsidiary company. Holding company acquired the 80% shares of Subsidiary company on 1.4.2016 and revalued the building at Rs. 400,000. The book value of this building after revaluation and after charging depreciation as on 31.3.2017 shall be ______
A. Rs. 3,60,000
B. Rs. 3,00,000
C. Rs. 3,50,000
D. None of A,B and C
11. Goodwill arising on amalgamation is to be _________
A. Retained in the books of the transferee company
B. Amortized to income on a systematic basis normally over five years
C. Adjusted against profit and loss account balance
D.All of the above
12. For Amalgamation in the nature of merger. Shareholders holding not less than _________ of the face value of the equity shares of the transferor company become equity shareholders of Transferee Company by virtue of the amalgamation.
A. 90%
B. 51%
C. 75%
D. None of A.B and C
13. Bills receivable of Subsidiary company amounts to Rs 80,000 accepted by Holding company and Bills payable of Holding company amounts to Rs. 90,000 payable to Subsidiary company, there is a contingent liability of Rs. 10,000 for Subsidiary Company for bills discounted in bank. What will be the amount of Bills receivable and Bills payable in the Consolidated Balance Sheet?
A. B/R Nil and B/P Rs 10,000
B. B/R Rs 90,000 and B/P Rs 90,000
C. B/R 80,000 and B/P Rs 80,000
D. None of A, B and C
14. Debtors are Rs 15,000 and Rs. 12,000 of Holding and Subsidiary company respectively and Creditors amount to Rs 25,000 and Rs 35,000 respectively. During the year Subsidiary company had sold goods worth Rs 5,000 on credit to holding
company and also purchased goods worth Rs 4,000 on credit from holding company. At the time of preparing Consolidated Balance sheet what amount of consolidated Debtors and Creditors should be recorded?
A. Debtors Rs 18,000 and Creditors Rs 60,000
B. Debtors Rs 27,000 and Creditors Rs 51,000
C. Debtors Rs 18,000 and Creditors Rs 51,000
D. None of A, B and C
15. No Joumal entry is required for the cancellation of ________ share capital.
A. Called-up
B. Issued
C. Paid up
D. Unissued
16. Under Amalgamation, in the nature of purchase, to record the Statutory Reserves of the Transferor Company in the books of the Transferee Company, the relevant statutory Reserve account is credited and the corresponding debit is given to _____
A. Miscellaneous Account
B. Amalgamation Adjustment Account
C. Goodwill Account
D. Profit and Loss Account
17. The balance in the Capital Reduction Account, after writing off accumulated losses is transferred to ________ account.
A. General Reserve
B. Share Capital
C. Security Premium
D. Capital Reserve
18. The company which is amalgamated into another company is called as:
A. Transferor Company
B. Transferee Company
C. both A & B
D. None of A ,B and C
19. Following is/are inter-company transactions
A. Granting of loan by holding company to subsidiary company and Vice versa
B. Sale of goods on credit by the holding company to the subsidiary company and
Vice versa
C. Drawing of bills of exchange by the holding company on subsidiary company and Vice versa
D. All of the above
20. Minority interest shown in the consolidated balance sheet
A. Is Equity held by holding
B. Is Equity held by outsiders?
C. Is equity held by directors?
D. Is equity held by employee?
21. Reduction in share capital includes:
A. Refunding the surplus paid up capital
B. Writing off lost capital
C. both A & B
D. None of A, B and C
22. The goods sold by Subsidiary Company to Holding company is ________
A. Upward stream sale
B. Downward stream sale
C. Not considered as sale
D. None of A,B and C
23. B Ltd, a subsidiary company sold goods worth Rs. 12,000 to A Ltd., its holding company at 20% profit on cost. If 20% of the stock has remained unsold, the amount of unrealized profit to be deducted from the profits of selling company will be ________ (the holding ratio is 3:1)
A. 2,400
B. 2,000
C. 400
D. 300
24. The excess of cost of acquisition over the sum of paid up value of shares held and proportionate share in pre-acquisition profits is _______
A. Capital loss
B. Capital gain
C. Revenue Loss
D. Revenue gain
25. While preparing the consolidated balance sheet, the amount of cost of control (goodwill) is Rs. 2,50,000 and the consolidated amount of Capital Reserve is Rs. 2,20,000. Which of following treatment should be adopted?
A. Show Goodwill as intangible asset and Capital Reserve under the head Reserves &
Surplus
B. Show Goodwill Rs. 30,000 as Intangible asset
C. Do not disclose goodwill or Capital Reserve in the balance sheet
D. None of the A, B and C
26. Under pooling of interest method the difference between the purchase consideration and share capital of the transferor, company should be adjusted to:
A. General reserve and profit & loss account
B. Amalgamation adjustment account
C. Goodwill or capital reserve
D. None of A, B and C
27. Which of the following statements is/are true or false:
1. Goodwill or capital reserve arises only when the amalgamation is in the nature or merger
2.Under the pooling of interest method, the transferee company incorporates only the liabilities and assets of the transferor company.
3. Goodwill arising on amalgamation cannot be written off.
4. The process of two or more companies combining to form a new company is called reconstruction.
A. False, True, False, False
B. True, False, False, False
C. False, False, True, False
D. False, False, False, False
28. When the equity share capital face value is to be reduced from Rs. 10 (Rs. 7 called up) to Rs. 6 per share for the purpose of internal reconstruction then, what will be the amount credited to Capital reduction A/c?
A. Rs. 7
B. Rs. 1
C. Rs. 6
D. None of A, B and C
29. 'H' Limited acquired shares of 'S' Limited on 01.09.2016. The Profit and Loss Account of 'S' Limited showed a debit balance of Rs.3,00,000 on 1.4.2016 and balance of Profit and Loss Account on 31.03.2017 was Rs.1,80,000 (Cr.). The
Capital Profit/ Loss is Rs. ______
A. Rs.2,00,000 (Profit)
B. Rs.2,00,000 (Loss)
C. Rs.1,00,000 (Profit)
D. Rs.1,00,000 (Loss)
30. 'X' Limited take over 'Y' Limited on 01.04.2017 and discharges Purchase
Consideration as follows:-
(i) Issued 84,000 fully paid equity shares of Rs.10 each at par to the equity share
holders of 'Y' Limited.
(ii) Issued fully paid 11% preference shares of Rs.100 each to discharge the preference share holders (Rs.3,40,000) of 'Y' Limited at a premium of 10%.
(iii) It is agreed that the debentures of 'Y' Limited (Rs. 1,50,000) will be converted into equal number and amount of 12% debentures of X Limited.
The purchase consideration payable by 'X' Limited to 'Y' Limited is ________
A. Rs.13,64,000
B. Rs.11,80,000
C. Rs. 12,14,000
D. Rs.13,30,000
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