{"id":17028,"date":"2022-03-31T11:46:15","date_gmt":"2022-03-31T06:16:15","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=17028"},"modified":"2026-02-09T20:24:52","modified_gmt":"2026-02-09T14:54:52","slug":"mcqs-on-amalgamation","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/mcqs-on-amalgamation\/","title":{"rendered":"MCQ&#8217;s on Amalgamation &#8211; Absorption and External Reconstruction AS-14 | (Free Resource)"},"content":{"rendered":"\n<h2 class=\"wp-block-heading has-text-align-center\"><strong>MCQ&#8217;s on Amalgamation<\/strong><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/03\/MCQs-on-Amalgamation-1024x576.webp\" alt=\"MCQ&#039;s on Amalgamation - Absorption and External Reconstruction AS-14 | (Free Resource)\" class=\"wp-image-17110 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/03\/MCQs-on-Amalgamation-1024x576.webp 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/03\/MCQs-on-Amalgamation-300x169.webp 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/03\/MCQs-on-Amalgamation-768x432.webp 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/03\/MCQs-on-Amalgamation-1536x864.webp 1536w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/03\/MCQs-on-Amalgamation-640x360.webp 640w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/03\/MCQs-on-Amalgamation.webp 1920w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><figcaption class=\"wp-element-caption\">MCQ&#8217;s on Amalgamation &#8211; Absorption and External Reconstruction AS-14<\/figcaption><\/figure>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/financial-accounting-mcqs\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/financial-accounting-mcqs\/\">MCQs on other topics of Financial Accounting <\/a><\/strong><\/li>\n\n\n\n<li><a href=\"https:\/\/www.icsi.edu\/media\/webmodules\/modelquestionpaper\/CMA-MCQ%20100.pdf\" data-type=\"URL\" data-id=\"https:\/\/www.icsi.edu\/media\/webmodules\/modelquestionpaper\/CMA-MCQ%20100.pdf\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Cost Accounting MCQs pdf <\/strong><\/a><\/li>\n<\/ul>\n\n\n\n<p><strong>1. Companies may combine in following ways<\/strong><br>(i) absorption <br>(ii) amalgamation<br>(iii) external reconstruction <br>(iv) internal reconstruction<br>(v) merger<br>(a) any of above <br>(b) none of above<br>(c) any except (iv) <br>(d) any except (v)<\/p>\n\n\n\n<p><strong>2. If the ABC Limited and DEF Limited are taken over by a new company XYZ Limite<\/strong>d<br>(a) it is called absorption <br>(b) it is called amalgamation<br>(c) it is called external reconstruction <br>(d) it is called internal reconstruction<\/p>\n\n\n\n<p><strong>3. If the ABC Limited and DEF Limited are taken over by a new company XYZ Limited<\/strong><br>(a) ABC Ltd. and DEF Ltd. are known as the \u201cVendor Companies\u201d<br>(b) ABC Ltd. and XYZ Ltd. are known as the \u201cVendor Companies\u201d<br>(c) XYZ Ltd. and DEF Ltd. are known as the \u201cVendor Companies\u201d<br>(d) XYZ Ltd. is known as the \u201cVendor Company\u201d<\/p>\n\n\n\n<p><strong>4. If the ABC Limited and DEF Limited are taken over by a new company XYZ Limited<br><\/strong>(a) ABC Ltd. and DEF Ltd. are known as the \u201cPurchasing Companies\u201d<br>(b) ABC Ltd. and XYZ Ltd. are known as the \u201cPurchasing Companies\u201d<br>(c) XYZ Ltd. and DEF Ltd. are known as the \u201cPurchasing Companies\u201d<br>(d) XYZ Ltd. is known as the \u201cPurchasing Company\u201d<\/p>\n\n\n\n<p><strong>5. If the business of an existing company ABC Limited is taken over by an existing company PQR Limited, it is called<br><\/strong>(a) external reconstruction <br>(b) internal reconstruction<br>(c) absorption <br>(d) amalgamation<\/p>\n\n\n\n<p><strong>6. If the business of an existing company ABC Limited is taken over by an existing company PQR Limited,<br><\/strong>(a) ABC Ltd. is known as the \u201cVendor Company\u201d; and PQR Ltd. is known as the \u201cPurchasingCompany\u201d<br>(b) ABC Ltd. and PQR Ltd. are known as the \u201cPurchasing Companies\u201d<br>(c) PQR Ltd. is known as the \u201cVendor Company\u201d; and ABC Ltd. is known as the \u201cPurchasingCompany\u201d<br>(d) ABC Ltd. and PQR Ltd. are known as the \u201cVendor Companies\u201d<\/p>\n\n\n\n<p><strong>7. If the business of ABC Limited, a loss-making company, is taken over by a new company ABC(New) Limited, it is called<br><\/strong>(a) internal reconstruction <br>(b) absorption<br>(c) external reconstruction <br>(d) amalgamation<\/p>\n\n\n\n<p><strong>8. If the business of ABC Limited, a loss-making company, is taken over by a new company ABC(New) Limited,<br><\/strong>(a) ABC Ltd. is known as the \u201cVendor Company\u201d; and ABC (New) Ltd. is known as the \u201cPurchasing Company\u201d<br>(b) ABC Ltd. and ABC (New) Ltd. are known as the \u201cPurchasing Companies\u201d<br>(c) ABC (New) Ltd. is known as the \u201cVendor Company\u201d; and ABC Ltd. is known as the \u201cPurchasing Company\u201d<br>(d) ABC Ltd. and ABC (New) Ltd. are known as the \u201cVendor Companies\u201d<\/p>\n\n\n\n<p><strong>9. When the merger involves liquidation of two existing companies and formation of one new company, it is called<br><\/strong>(a) internal reconstruction <br>(b) absorption<br>(c) external reconstruction <br>(d) amalgamation<\/p>\n\n\n\n<p><strong>10. When the merger involves liquidation of one or more existing companies and formation of no new company, it is called<br><\/strong>(a) internal reconstruction <br>(b) absorption<br>(c) external reconstruction <br>(d) amalgamation<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answers:<\/strong> <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\">1)any except (iv)  2)it is called amalgamation  3)ABC Ltd. and DEF Ltd. are known as the \u201cVendor Companies\u201d  4)XYZ Ltd. is known as the \u201cPurchasing Company\u201d<\/mark> <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"> 5)absorption  6)ABC Ltd. is known as the \u201cVendor Company\u201d; and PQR Ltd. is known as the \u201cPurchasingCompany\u201d  7)external reconstruction  8)ABC Ltd. is known as the \u201cVendor Company\u201d; and ABC (New) Ltd. is known as the \u201cPurchasing Company\u201d  9)amalgamation  10)absorption<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>11. When the merger involves liquidation of one existing sick company and formation of one new company, it is called<br><\/strong>(a) internal reconstruction <br>(b) absorption<br>(c) external reconstruction <br>(d) amalgamation<\/p>\n\n\n\n<p><strong>12. A feature which is common in all cases of merger viz. absorption, amalgamation and external reconstruction is<br><\/strong>(a) purchase of one company by another company<br>(b) liquidation of at least two companies<br>(c) formation of at least one new company<br>(d) liquidation at least one existing company and formation of at least one new company<\/p>\n\n\n\n<p><strong>13. Under the Companies Act, 1956,<br><\/strong>(a) absorption\u2019 includes \u2018\u2019amalgamation\u201d<br>(b) amalgamation\u2019 includes \u2018absorption\u2019<br>(c) amalgamation\u2019 excludes \u2018absorption\u2019<br>(d) internal reconstruction\u2019 includes \u2018\u2019external reconstruction\u201d<\/p>\n\n\n\n<p><strong>14. Accounting for amalgamation is governed by<br><\/strong>(a) Accounting Standard 1 <br>(b) Accounting Standard 13<br>(c) Accounting Standard 14 <br>(d) Accounting Standard 11<\/p>\n\n\n\n<p><strong>15. Accounting for absorption is governed by<br><\/strong>(a) Accounting Standard 1 <br>(b) Accounting Standard 13<br>(c) Accounting Standard 14 <br>(d) Accounting Standard 11<\/p>\n\n\n\n<p><strong>16. Accounting for amalgamation by way of purchase is governed by<br><\/strong>(a) Accounting Standard 1 <br>(b) Accounting Standard 13<br>(c) Accounting Standard 14 <br>(d) None of the above<\/p>\n\n\n\n<p><strong>17. Accounting for amalgamation by way of merger is governed by<br><\/strong>(a) Accounting Standard 1 <br>(b) Accounting Standard 13<br>(c) Accounting Standard 14 <br>(d) None of the above<\/p>\n\n\n\n<p><strong>18. According to AS 14, Transferor Company means the Company<br><\/strong>(a) which is amalgamated into another Company<br>(b) into which a Company is amalgamated<br>(c) which is newly formed<br>(d) none of the above<\/p>\n\n\n\n<p><strong>19. According to AS 14, Transferee Company means the Company<br><\/strong>(a) which is amalgamated into another Company<br>(b) into which a Company is amalgamated<br>(c) which is liquidated<br>(d) none of the above<\/p>\n\n\n\n<p><strong>20. According to AS 14, Amalgamations fall into two categories<br><\/strong>(a) amalgamation and absorption<br>(b) merger and purchase<br>(c) amalgamation and reconstruction<br>(d) external reconstruction and internal reconstruction<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answers:<\/strong> <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\">11)external reconstruction  12)purchase of one company by another company  13)amalgamation\u2019 includes \u2018absorption\u2019  14)Accounting Standard 14  15)Accounting Standard 14<\/mark> <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"> 16)Accounting Standard 14   17)Accounting Standard 14  18)which is amalgamated into another Company  19)into which a Company is amalgamated  20)merger and purchase<\/mark> <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>21. On amalgamation, Share issue Expenses A\/c appearing on Assets side of the balance sheet of the vendor company<br><\/strong>(a) is closed by debit to Realisation A\/c<br>(b) is closed by debit to Equity Shareholders A\/c<br>(c) is closed by debit to Profit &amp; Loss A\/c<br>(d) is closed by credit to Equity Shareholders A\/c<\/p>\n\n\n\n<p><strong>22. On amalgamation, Profit &amp; Loss A\/c (Dr.) balance of the vendor company<br><\/strong>(a) is closed by debit to Realisation A\/c<br>(b) is closed by debit to Equity Shareholders A\/c<br>(c) is closed by credit to Equity Shareholders A\/c<br>(d) is closed by credit to Realisation A\/c<\/p>\n\n\n\n<p><strong>23. On amalgamation, Debenture A\/c appearing in the balance sheet of the vendor company<br><\/strong>(a) is closed by credit to Purchasing Company A\/c, if debentures are taken over by the purchasing company<br>(b) is closed by credit to Realisation A\/c, whether debentures are taken over by the new company or not<br>(c) is closed by credit to Debentureholders A\/c, if debentures are not taken over by the new company<br>(d) is closed by debit to Realisation A\/c, whether debentures are taken over by the new company or not<\/p>\n\n\n\n<p><strong>24. On amalgamation, Provident Fund A\/c appearing on the Liabilities side in the balance sheet ofthe vendor company<br><\/strong>(a) is closed by credit to Purchasing Company A\/c<br>(b) is closed by credit to Realisation A\/c<br>(c) is closed by credit to Equity Shareholders A\/c<br>(d) is closed by debit to Realisation A\/c<\/p>\n\n\n\n<p><strong>25. On amalgamation, Sinking Fund A\/c appearing on the Liabilities side in the balance sheet of thevendor company<br><\/strong>(a) is closed by credit to Purchasing Company A\/c<br>(b) is closed by credit to Realisation A\/c<br>(c) is closed by credit to Equity Shareholders A\/c<br>(d) is closed by debit to Realisation A\/c<\/p>\n\n\n\n<p><strong>26. On amalgamation, if the dissolution expenses are paid as well as borne by the purchasing company<br><\/strong>(a) Entries are passed in the books of the purchasing as well as the vendor company<br>(b) no entry is passed in the books of the vendor company<br>(c) no entry is passed in the books of the purchasing company<br>(d) no entry is passed in the books of the purchasing as well as the vendor company<\/p>\n\n\n\n<p><strong>27. On amalgamation, if pref. shares are settled at a premium<br><\/strong>(a) the premium is credited to Realisation A\/c<br>(b) the premium is debited to Realisation A\/c<br>(c) the premium is credited to Security Premium A\/c<br>(d) the premium is debited to Capital Reserve A\/c<\/p>\n\n\n\n<p><strong>28. On amalgamation, accounting procedure used by the vendor company<br><\/strong>(a) is the same in all types of amalgamation<br>(b) is different depending upon whether the amalgamation is in the nature of a merger or apurchase as defined by Accounting Standard 14<br>(c) is different depending upon whether the companies are private or public<br>(d) is different depending upon the amount of purchase consideration<\/p>\n\n\n\n<p><strong>29. On amalgamation, accounting procedure used by the purchasing company<br><\/strong>(a) is the same in all types of amalgamation<br>(b) is different depending upon whether the amalgamation is in the nature of a merger or apurchase as defined by Accounting Standard 14<br>(c) is different depending upon whether the companies are private or public<br>(d) is different depending upon the amount of purchase consideration<\/p>\n\n\n\n<p><strong>30. All the assets and liabilities of the vendor company become the assets and liabilities of thepurchasing company<br><\/strong>(a) if the amalgamation is in the nature of merger as defined under AS 14<br>(b) if the amalgamation is in the nature of absorption as defined under the Companies Act<br>(c) if the amalgamation is in the nature of external reconstruction as defined under the CompaniesAct<br>(d) if the amalgamation is in the nature of purchase as defined under AS 14<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answer:<\/strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"><strong> <\/strong>21)is closed by debit to Equity Shareholders A\/c  22)is closed by debit to Equity Shareholders A\/c  23)is closed by credit to Realisation A\/c, whether debentures are taken over by the new company or not  24)is closed by credit to Realisation A\/c  25)is closed by credit to Equity Shareholders A\/c  26)no entry is passed in the books of the vendor company  27)the premium is debited to Realisation A\/c  28)is the same in all types of amalgamation  29)is different depending upon whether the amalgamation is in the nature of a merger or apurchase as defined by Accounting Standard 14  30)if the amalgamation is in the nature of merger as defined under AS 14<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>31. Shareholders holding not less than 90% of the face value of the equity share capital in thevendor company become equity shareholders in the purchasing company<br><\/strong>(a) if the amalgamation is in the nature of merger as defined under AS 14<br>(b) if the purchase consideration is calculated under payment method<br>(c) if the amalgamation is in the nature of external reconstruction as defined under the CompaniesAct<br>(d) if the amalgamation is in the nature of purchase as defined under AS 14<\/p>\n\n\n\n<p><strong>32. The assets and liabilities of the vendor company are incorporated in the accounts of the purchasing company at book values<br><\/strong>(a) if the amalgamation is in the nature of merger as defined under AS 14<br>(b) if the amalgamation is in the nature of purchase as defined under AS 14<br>(c) if the purchase consideration is calculated under Net Assets method<br>(d) if the amalgamation is in the nature of external reconstruction as defined under the CompaniesAct<\/p>\n\n\n\n<p><strong>33. In the books of the purchasing company, the assets and liabilities of the vendor company are incorporated on the basis of their agreed values (i.e. either the book values or the fair values)<br><\/strong>(a) if the amalgamation is in the nature of merger as defined under AS 14<br>(b) if the amalgamation is in the nature of purchase as defined under AS 14<br>(c) if the purchase consideration is calculated under Net Assets method<br>(d) if the amalgamation is in the nature of external reconstruction as defined under the CompaniesAct<\/p>\n\n\n\n<p><strong>34. The difference between the purchase consideration and the net assets of the vendor company,if any, is either debited to the Goodwill Account or credited to the Capital Reserve Account<br><\/strong>(a) if the amalgamation is in the nature of merger as defined under AS 14<br>(b) if the amalgamation is in the nature of purchase as defined under AS 14<br>(c) if the purchase consideration is calculated under Net Assets method<br>(d) if the amalgamation is in the nature of external reconstruction as defined under the CompaniesAct<\/p>\n\n\n\n<p><strong>35. Under purchase method of amalgamation, the reserves of the vendor Company<br><\/strong>(a) are not brought in the books of the purchasing company<br>(b) (except a statutory reserve) are not brought in the books of the purchasing company<br>(c) are brought in the books of the purchasing company<br>(d) (except a statutory reserve) are brought in the books of the purchasing company<\/p>\n\n\n\n<p><strong>36. Amalgamation Adjustment Reserve<br><\/strong>(a) should be shown as a Fixed Asset in the balance sheet of the purchasing company<br>(b) should be shown as a Fictitious Asset in the balance sheet of the vendor company<br>(c) should be shown under Reserves and Surplus in the balance sheet of the purchasing company<br>(d) should be shown as a Fictitious Asset in the balance sheet of the purchasing company<\/p>\n\n\n\n<p><strong>37. The amounts paid by the purchasing company to discharge the debentures are<br><\/strong>(a) ignored while calculating purchase consideration by net payment method<br>(b) ignored while calculating purchase consideration by net asset method<br>(c) considered while calculating purchase consideration by net payment method<\/p>\n\n\n\n<p><strong>38. The amounts paid by the purchasing company to discharge the contingent liabilities are<br><\/strong>(a) ignored while calculating purchase consideration by net payment method<br>(b) ignored while calculating purchase consideration by net asset method<br>(c) considered while calculating purchase consideration by net payment method<\/p>\n\n\n\n<p><strong>39. The amounts paid by the purchasing company to meet the expenses of winding up are<br><\/strong>(a) ignored while calculating purchase consideration by net payment method<br>(b) ignored while calculating purchase consideration by net asset method<br>(c) considered while calculating purchase consideration by net payment method<\/p>\n\n\n\n<p><strong>40. The agreed values at which the assets or liabilities are taken over by the purchasing company are<br><\/strong>(a) ignored while calculating purchase consideration by net payment method<br>(b) ignored while calculating purchase consideration by net asset method<br>(c) considered while calculating purchase consideration by net payment method<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answer:<\/strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"><strong> <\/strong>31)if the amalgamation is in the nature of purchase as defined under AS 14  32)if the amalgamation is in the nature of merger as defined under AS 14  33)if the amalgamation is in the nature of purchase as defined under AS 14  34)if the amalgamation is in the nature of purchase as defined under AS 14  35)(except a statutory reserve) are not brought in the books of the purchasing company  36)should be shown under Reserves and Surplus in the balance sheet of the purchasing company  37)ignored while calculating purchase consideration by net payment method. 38)ignored while calculating purchase consideration by net payment method  39)ignored while calculating purchase consideration by net payment method<br>  40)ignored while calculating purchase consideration by net payment method<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>41. The value of assets or liabilities not taken over by the purchasing company is<br><\/strong>(a) ignored while calculating purchase consideration by net payment method<br>(b) ignored while calculating purchase consideration by net asset method<br>(c) considered while calculating purchase consideration by net asset method<\/p>\n\n\n\n<p><strong>42. The Unamortized Expenditure not written off is<br><\/strong>(a) ignored while calculating purchase consideration by net payment method<br>(b) ignored while calculating purchase consideration by net asset method<br>(c) considered while calculating purchase consideration by net asset method<\/p>\n\n\n\n<p><strong>43. Liquidation expenses of Vendor Co. agreed to be paid \/ re-imbursed by the Purchasing Co.,should be<br><\/strong>(a) considered while calculating purchase consideration by net payment method<br>(b) considered while calculating purchase consideration by net asset method<br>(c) ignored while calculating the purchase consideration (whether under net payments methodor net assets method).<\/p>\n\n\n\n<p><strong>44. As per AS-14 purchase consideration is what is payable to<br><\/strong>(a) Shareholders <br>(b) Shareholders and debenture holders<br>(c) Shareholders and creditors <br>(d) None of the above<\/p>\n\n\n\n<p><strong>45. When amalgamation is in the nature of merger, the accounting method to be followed is :<br><\/strong>(a) Equity method <br>(b) Purchase method<br>(c) Pooling of interests method <br>(d) None of the above<\/p>\n\n\n\n<p><strong>46. Amalgamation adjustment reserve is opened in the books of transferee company to incorporate<br><\/strong>(a) The assets of the transferor company<br>(b) The liabilities of the transferor company<br>(c) The statutory reserves of the transferor company<br>(d) None of the above<\/p>\n\n\n\n<p><strong>47. Under the &#8216;Purchase method of accounting&#8217; , the transferee company incorporates in its books:<br><\/strong>(a) Only the assets and liabilities of the transferor company<br>(b) Only the assets, liabilities and statutory reserves of the transferor company<br>(c) Only the assets, liabilities and reserves of the transferor company.<br>(d) None of the above<\/p>\n\n\n\n<p><strong>48. Goodwill arising on amalgamation is to be<br><\/strong>(a) Retained in the books of the transferee company.<br>(b) Amortised to income on a systematic basis<br>(c) Adjusted against reserves and profit and loss account of the transferee company immediately.<br>(d) None of the above<\/p>\n\n\n\n<p><strong>49. Under the pooling of interests method the difference between the purchase consideration and share capital of transferee company should be adjusted to :<br><\/strong>(a) General reserve <br>(b) Amalgamation adjustment reserve<br>(c) Goodwill or capital reserve <br>(d) None of the above<\/p>\n\n\n\n<p><strong>50. At the time of amalgamation, purchase consideration does not include<br><\/strong>(a) The sum which the transferee company will directly pay to the creditors of the transferor company.<br>(b) Payments made in the form of assets by the transferee company to the shareholders of the transferor company.<br>(c) Preference shares issued by the transferee company to the preference shareholders of the transferor company.<br>(d) preference shares issued by the transferee company to the equity shareholders of the transferor company<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answer:<\/strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"><strong> <\/strong>41)ignored while calculating purchase consideration by net asset method  42)ignored while calculating purchase consideration by net asset method  43)ignored while calculating the purchase consideration (whether under net payments method or net assets method)  44)Shareholders  45)Pooling of interests method  46)The statutory reserves of the transferor company  47)Only the assets, liabilities and statutory reserves of the transferor company  48)Amortised to income on a systematic basis  49)General reserve  50)The sum which the transferee company will directly pay to the creditors of the transferor company<\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>51. The asset which is not taken under the Net assets method of calculating purchase consideration is<br><\/strong>(a) Loose Tools <br>(b) Bills Receivables<br>(c) Machinery <br>(d) Share issue Expenses<\/p>\n\n\n\n<p><strong>52. &#8216;Pooling of interest&#8217; is a method of<br><\/strong>(a) Charging Depreciation <br>(b) Accounting for Amalgamation<br>(c) Calculation of Purchase Consideration <br>(d) None of the above<\/p>\n\n\n\n<p><strong>53. In which of the following methods, the purchase consideration is calculated on the basis of the agreed value of the shares of the transferor company ?<br><\/strong>(a) Net Asset Method <br>(b) Net Payment Method<br>(c) Intrinsic Value Method <br>(d) None of the above<\/p>\n\n\n\n<p><strong>54. The adjustment entry passed to eliminate the inter-company bills of exchange is<br><\/strong>(a) Debit bills payable a\/c credit bills receivable a\/c<br>(b) Debit bills receivable a\/c credit bills payable a\/c<br>(c) Debit amalgamation adjustment a\/c, credit statutory reserve a\/c<br>(d) None of the above<\/p>\n\n\n\n<p><strong>55. Under &#8216;Purchase method&#8217;, any excess of the amount of purchase consideration over the net acquired assets of the transferor company should be recognised as;<br><\/strong>(a) Capital Reserve <br>(b) Goodwill<br>(c) Profit &amp; Loss A\/c <br>(d) None of the above<\/p>\n\n\n\n<p><strong>56. If there is a provision (RDD) against the debtors, such debtors are transferred to the Realisation a\/c at<br><\/strong>(a) Net Amount i.e. Debtors less RDD <br>(b) Current Market Value<br>(c) Gross Amount of Debtors <br>(d) None of the above<\/p>\n\n\n\n<p><strong>57. Under payments method, purchase consideration for the amalgamation means<br><\/strong>(a) Aggregate of shares and cash to shareholders<br>(b) Aggregate of shares, cash and payment to debenture holders<br>(c) Shares, cash, payment to debenture holders and expenses of realisation<br>(d) None of the above<\/p>\n\n\n\n<p><strong>58. Loss or profit on realisation a\/c is transferred by the transferor company, under amalgamation to<br><\/strong>(a) Preference shareholders a\/c <br>(b) Equity shareholders a\/c<br>(c) Profit &amp; loss appropriation a\/c <br>(d) None of the above<\/p>\n\n\n\n<p><strong>59. Intrinsic value of each equity share of the transferor company is&nbsp;Rs&nbsp;250 and that of the transferee company is&nbsp;Rs&nbsp;400. The ratio of exchange of shares on the basis of intrinsic value is<br><\/strong>(a) 2 : 1 <br>(b) 8 : 8<br>(c) 8 : 5 <br>(d) None of the above<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Answer:<\/strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"><strong> <\/strong>51)Share issue Expenses<font color=\"#000000\"><span style=\"caret-color: rgb(0, 0, 0);\">.<\/span><\/font><\/mark> <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\">52)Accounting for Amalgamation  53)Intrinsic Value Method  54)Debit bills payable a\/c credit bills receivable a\/c  55)Goodwill<\/mark> <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-red-color\"> 56)Gross Amount of Debtors  57)Aggregate of shares and cash to shareholders  58)Equity shareholders a\/c  59)8 : 5 <\/mark><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/youtu.be\/ePQ-FwpV9_U\" data-type=\"link\" data-id=\"https:\/\/youtu.be\/ePQ-FwpV9_U\" target=\"_blank\" rel=\"noopener\">Video<\/a> lectures on Amalgamation MCQ&#8217;s.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":17110,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,7],"tags":[4763],"class_list":["post-17028","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bcom","category-degree-college","tag-mcqs-on-amalgamation"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/17028","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=17028"}],"version-history":[{"count":5,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/17028\/revisions"}],"predecessor-version":[{"id":41914,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/17028\/revisions\/41914"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/17110"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=17028"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=17028"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=17028"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}