AMALGAMATION

Solution
QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d
Amalgamation is covered under _____. AS–14 AS 1 AS 12 AS 13 AS–14
Amalgamations are of _____ types. two three four one two
Amalgamation needs to be approved by _____ % of shareholders. 75% 65% 55% 57% 75%

firms and Directors and

AS–14 covers only amalgamation of _____. companies firms companies
company Partners
The payment made to debenture holders should _____ be
not Gross amount Net amount Market value not
included in consideration.
The approval by _____ of shareholders is necessary for
80%, merger 90%, merger 70%, merger 60%, merger 90%, merger
amalgamation in the nature of _____.
The two methods of accounting for amalgamation are relevant for
Dissolved transferee Liquidated Formed transferee
_____ company.
_____ method provides that assets and liabilities should be security Pooling of None of the Pooling of
capital reserve
recorded at book value by a new company. premium Interest above Interest
Purchase method requires accounting for assets and liabilities at Plant and Underwriting None of the agreed /
agreed / revised
_____ by transferee company. machinery commission above revised
Amalgamation Adjustment Account is applicable per _____ None of the
cost purchase book value purchase
method of accounting. above
firms and None of the
Amalgamation includes _____ reconstruction. internal external external
company above
None of the
Amalgamation of _____ is not covered under AS–14. companies purchase firms firms
above
Arrangement between _____ or more companies is necessary for
two three one four one
amalgamation.
None of the amalgamatio
Merger or absorption are schemes of _____. Dissolved transferee amalgamation
above n
Reserves of transferor company is required to be adjusted purchase pooling of None of the pooling of
capital reserve
under_____ method of accounting. method interest above interest
pooling of Pooling of None of the pooling of
Unrecorded assets cannot be accounted per _____ method. capital reserve
interest Interest above interest
Amalgamation which does not fulfill conditions of merger is purchase pooling of None of the purchase
external
called _____. method interest above method
None of the
Capital Reduction is _____ a variety of amalgamation. Net amount not Gross amount not
above
The accounting for transferor company is in _____ manner None of the
book value same purchase same
irrespective of type of amalgamation. above
Goodwill or capital reserve can arise under _____ method of security None of the
purchase same purchase
accounting. premium above
None of the
In merger, all assets and liabilities are taken over at _____. book value purchase same book value
above
In amalgamation, the purchasing company is called as _____ None of the
Transferee transferor purchase Transferee
company. above
In amalgamation, the vendor company is called as _____ None of the
transferor Net amount Transferee transferor
company. above
Pooling of security security None of the Pooling of
_____ _____ _____ Method is followed for accounting merger.
Interest premium premium above Interest
debenturehold security None of the debenturehol
Payment to _____ does not form part of purchase consideration. purchase
ers premium above ders

security purchase None of the purchase

Payment of liquidation expenses does not form part of _____. Net amount
premium consideration above consideration

As per AS–14, goodwill arising on amalgamation should be

2 4 5 3 5
written off within _____ years.
Dissolution expenses paid by purchasing company are debited to None of the
purchase Gross amount Goodwill Goodwill
_____ Account in purchase. above
 Preference
Dissolution expenses paid by purchasing company are debited to Profit & Loss None of the
Shareholders G.R. A/c G.R. A/c
_____ in merger. Account above
Account
In merger, shareholders holding _____% of the face value of
equity shares become equity shareholders of the transferee 90 90
company. 20 80 70
Preliminary expenses are transferred to _____ Shareholders None of the
Equity transferor Net amount Equity
Account. above
Purchase of one
Combination
company by None of the Liquidated
In merger, vendor companies are _____. Liquidated co. of at least two
another above co.
companies
company
The company amalgamated into another company is _____ Reserves & None of the
transferor transferee transferor
company. Surplus above
Reserves & None of the
Purchasing company is called as _____ company. transferee transferor transferee
Surplus above
equity equity
On amalgamation preliminary expenses are debited to _____ pooling of Pooling of None of the
shareholder's shareholder's
_____ _____. interest Interest above
A/c A/c
Premium on settlement of preference shares is debited to _____ None of the
Realisation Liquidated co. Net amount Realisation
A/c. above
Preference
Amalgamation Adjustment Reserve A/c appears in the Balance Profit & Loss Reserves & None of the Reserves &
Shareholders
sheet under _____ _____. Account Surplus above Surplus
Account
equity equity
pooling of Pooling of None of the
Profit on Realisation is transferred to _____ _____ A/c. shareholders shareholders
interest Interest above
A/c A/c
Amalgamation of companies is governed by _____. AS–13 AS–14 AS–9 AS–11 AS–14
two and
The scheme of amalgamation can involve _____ companies none two one three
three
Registrar of Central
The amalgamation requires approval of _____. High Court Directors High Court
Companies Government
Approval by ____ a shareholders is necessary for treatment as in
51% 75% 90% 80% 90%
nature of merger.
Approval by _____ % of shareholders is required for
51% 75% 80% 90% 80%
implementation of the scheme of amalgamation.
In case of purchase method, transferee company should record
book value cost market value agreed value agreed value
assets at _____.
In case of pooling of interest method, transferee company should
cost market value agreed value book value book value
record assets at _____.
Amalgamation Adjustment Reserve Account is required in respect general statutory security statutory
capital reserve
of _____. reserve reserve premium reserve
security capital
The excess of net asset value over consideration is _____. capital reserve profit or loss goodwill
premium reserve
firms and Directors and
AS–14 covers amalgamation of _____. companies firms companies
company Partners
On amalgamation, the transferer company transfer its assets to
agreed value book value market value original cost book value
Realisation Account at _____.
shareholders
Purchase consideration as per AS–14 is the amount payable to and shareholders none of the
shareholders shareholders
_____. debenturehold and creditors above
ers
Pooling of Pooling of
Purchase none of the
For accounting mergers, the method followed is _____. Interest Equity Method Interest
Method above
Method Method
General Amalgamation General
Under Pooling of Interest Method, the difference between Goodwill none of the
Reserve Adjustment Reserve
purchase consideration and share capital of Account above
Account Account Account
 accounting
providing valuation of accounting for none of the for
Pooling of Interest is a method of _____.
depreciation inventory amalgamation above amalgamatio
n
Under Purchase Method, any excess of purchase consideration Profit & Loss none of the
goodwill capital reserve goodwill
over net assets acquired should be Account above
Equity Preference Equity
Profit on Realisation Account is transferred by transferor Profit & Loss none of the
Shareholders Shareholders Shareholders
company to _____. Account above
Account Account Account
discount on
The asset, which is not taken under Net Asset Method of discount on
loose tools furniture bills receivable issue of
calculation of purchase consideration, is issue of shares
shares

Amalgamatio External Any of the Any of the

Companies may combine by _____. Absorption
n reconstruction above above

If Vijay Ltd. and Vishakha Ltd. are taken over by Swati Ltd. a External Internal Amalgamatio
Absorption Amalgamation
new company it is called _____. reconstruction reconstruction n
Amalgamatio External
If Deepa Ltd. is taken over by Ranbhir Ltd. it is called as Absorption Merger Absorption
n reconstruction

Santosh Ltd. Santosh Ltd. Santosh Ltd.

and Kumari and Kumari Ltd. is Kumar Ltd. is a and Kumari
If Santosh Ltd. and Kumari Ltd. are taken over by Santosh Kumar
Ltd. are Santoshkumar a purchasing purchasing Ltd. are
Ltd a new company _____.
Vendor Ltd. are Vendor Company company Vendor
Companies Companies Companies

External
If Santoshkumari Ltd. is taken over by Santoshkumar Ltd. a new Internal External
Absorption Merger reconstructio
company it is called _____. reconstruction reconstruction
n
Existing Holding New
On amalgamation business is taken over by _____. New company weak company
company company company
Merger of Merger of
Purchase of None of the
As per AS 14 amalgamation is of two types : Merger purchase of purchase of
business above
business business
None of the
On merger, vendor companies are _____. Liquidated Formed Dissolved Liquidated
above

Purchase of Purchase of
Liquidation of Liquidation of Combination of
one company one company
The common feature in merger, purchase of business is _____. at least two at least one at least two
by another by another
companies company companies
company company

Internal
Amalgamatio Absorption Amalgamation reconstruction Amalgamatio
As per Companies Act 1956, _____. n includes includes excludes includes n includes
absorption amalgamation absorption external absorption
reconstruction.

Accounting for amalgamation is governed by _____. AS 1 AS 14 AS 13 AS 11 AS 14

Accounting for absorption is governed by _____. AS 1 AS 13 AS 14 AS 11 AS 14
Accounting for amalgamation by merger is as per _____. AS 1 AS 13 AS 14 AS 11 AS 14
Accounting for amalgamation by purchase is as per _____. AS 1 AS 13 AS 14 AS 11 AS 14
which is
which is
Into which a amalagamate
amalagamated which is newly which is none
As per AS 14 transferor company means the company _____. company is d into
into another registered of the above
amalgamated. another
company
company
Vendor Purchasing Liquidated None of the Purchasing
Transferee company as per AS 14 is _____.
company company company above company
Equity Equity
On amalgamation preliminary expenses in Balance Sheet of Realisation Preference
shareholders Cash A/c shareholders
Vendor Company are debited to _____. A/c shareholder A/c
A/c A/c
 Equity Preference Equity
On amalgamation Profit and Loss A/c debit balance in Balance Realisation
Cash A/c shareholders shareholders shareholders
Sheet of Vendor Company is transferred A/c
A/c A/c A/c
Crediting to Crediting to
Realisation Crediting to Crediting to Realisation
Account, Realisation Realisation Account,
On amalgamation Debentures Account appearing in the Balance None of the
whether Account when Account when whether
Sheet of Vendor Company is closed by above
debentures are debentures are Debentures are debentures
taken over or taken over not taken over are taken
not over or not
Equity Preference
On amalgamation Provident Fund Account in the Balance Sheet Realisation Purchasing co's Realisation
Shareholders Shareholders
of Vendor Company is transferred to Account Account Account
Account Account
Preference Equity Purchasing Preference
Sinking Fund appearing in the Balance Sheet of Vendor Company Realisation
Shareholders Shareholders Companies Shareholders
is transferred to _____. Account
Account Account Account Account
Credited to
Debited to Credited to Debited to Debited to
On amalgamation if preference shares are settled at a premium, securities
Realisation Realisaiton Profit and Loss Realisation
the premium is _____. premium
Account Account Account Account
Account
The same in
The same in The different in Dependent on Dependent on
Accounting for amalgamation in the books of a Vendor Company all types of
all types of all types of the type of purchase
is _____. amalgamatio
amalgamation amalgamation company consideration
n
In amalgamation as a merger all the assets and liabilities of Transferee Vendor Holding Subsidiary Transferee
vendor company become the assets and company Company company company company
In the nature of In the nature of
Shareholders holding not less than 90% of the face value of equity In the nature In the nature of In the nature
purchase of internal
share capital in the Vendor Company of merger absorption of merger
business reconstruction
Market value
On amalgamation as a merger all assets and liabilities of the or Book value
Market value Book value Agreed value Book value
transferor company are incorporated in the which ever is
less

On amalgamation as a purchase of business assets and liabilities

Market Value Book Value Agreed Value Cost Agreed Value
are transferred to the books of transferee company at _____.

Under amalgamation as a purchase of business the reserves Statutory Profit and Loss All of the Statutory
General reserve
carried in the books of transferee company are _____. reserves only Account above reserves only

Statutory Statutory
Liabilities of Assets of
Amalgamation Adjustment Reserve Account is opened in the reserves of None of the reserves of
Transferor Transferor
books of transferee company to incorporate _____. transferor above transferor
company company
company company

Assets, Assets,
Assets,
Assets and liabilities and liabilities and
liabilities and
Under amalgamation as a purchase of business the transferee liabilities of statutory None of the statutory
reserves of
company incorporates in its books only _____. transferor reserves of above reserves of
transferor
company transferor transferor
company
company. company.

Retained in the
Amortized on Adjusted Amortized on
books of None of the
Goodwill arising on amalgamation is to be ______. a systematic against general a systematic
transferee above
basis reserves basis
company

Does not Appears in the Does not

Becomes part
become part of books of None of the become part
As per AS 14, payment of expenses on amalgamation _____. of purchase
purchase transferor above of purchase
consideration
consideration company only consideration
The asset which is not considered under Net Asset method of Underwriting Plant and Bills Underwriting
Stock
calculation of purchase consideration is _____. commission machinery receivable commission

Accounting
Accounting Calculation of
Stock None of the for
'Pooling of Interest' is a method of _____. for purchase
valuation above amalgamatio
amalgamation consideration
n
Under 'Purchase Method', excess of purchase consideration over Profit and Loss None of the
Goodwill Capital Reserve Goodwill
the net assets taken over is accounted as _____. Account above
In case provision for doubtful debts is against the debtors, the None of the Gross
Gross amount Net amount Market value
debtors are transferred to Realisation Account at _____. above amount
Payment to Payment to
Purchase consideration under payment method in amalgamation is Payment to Payment of Payment to
debentureholder preference
____. shareholders expenses shareholders
s shareholders
Equity Preference Equity
Debenturehold
Under amalgamation profit on Relisation is transferred to _____. shareholders shareholders Creditors A/c shareholders
ers A/c
A/c A/c A/c

Equity Preference Profit and Loss Equity

None of the
Under amalgamation Loss on Realisation is debited to _____. shareholders shareholders Appropriation shareholders
above
A/c A/c A/c A/c

Does not
Forms part of Does not form Debited to
As per AS 14 amalgamation under Net payment method payment None of the form part of
purchase part of purchase Realisation
to creditors by Transferee company _____. above purchase
consideration consideration A/c
consideration

FOREIGN CURRENCY
QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d Solution
_____ currency is the currency stated while presenting in final None of the
Reporting cash payable Reporting
account. above
_____ currency is the currency stated by other party to None of the
Foreign Indian Own Foreign
transaction. above
Profit & Loss accrual / None of the
Exchange rate is the ratio of _____ of two currencies. price / value price / value
Account payment above
As per AS–11 the exchange difference arising on date of
Debtors Trading None of the
settlement of monetary item should be _____ in the period to accounted accounted
Account Account above
which it relate.
As per revised AS–11 The exchange difference on settlement of
Profit & Loss None of the Profit & Loss
liabilities relating to purchase of fixed asset is transferred to trading Closing rate
Account above Account
_____.
The receivable amount in foreign currency on the date of Balance current None of the current
spot rate settlement
Sheet is converted at _____ rate. (closing) above (closing)
The liabilities in foreign currency are to be carried forward to current None of the current
settlement accounted
next year by conversion at _____ rate. (closing) above (closing)
The receivable and payable in foreign currency are called _____ None of the
Non-monetary monetary Reporting monetary
items. above
None of the
Average rate is the _____ of exchange rate. spot rate mean settlement mean
above
The transactions in foreign currency recorded in the books of None of the exchange
Average rate exchange rate spot rate
accounts at _____ on date on which transactions takes place. above rate
Fixed assets are carried in books for conversion as on the date of acquisition of None of the acquisition of
Creditors Bank A/c
_____. assets above assets
None of the
Settlement date is the date on which _____ are to be collected. accounted Non-monetary proceeds proceeds
above
None of the
The date on which liability is to be paid is called _____ date. Reporting monetary settlement settlement
above
The interest on foreign currency loans is to be converted at the Profit & Loss accrual / None of the accrual /
price / value
rate on the date of _____. Account payment above payment
The depreciation on fixed assets is to be converted at the rate on Debtors acquisition of None of the acquisition of
Sales Account
date of _____. Account assets above assets
None of the
_____ is the mean of the exchange rate during a period. spot rate Average rate Closing rate Average rate
above
None of the
_____ is the rate at the Balance Sheet date. Average rate Closing rate spot rate Closing rate
above
AS–11 should be applied in accounting for transactions in _____ None of the
indian foreign general foreign
currencies. above
None of the
Debtors and cash balance should be reported at _____ date. monetary reporting settlement reporting
above
Foreign currency is the currency other than the _____ currency of None of the
settlement reporting monetary reporting
a firm. above
None of the
_____ items are money held and assets to be received. Monetary Non-monetary Sales Account Monetary
above
None of the Non-
_____ items are assets and liabilities other than monetary items. Non-monetary monetary Closing rate
above monetary
None of the
_____ currency used in presenting the financial statements. Reporting general Average rate Reporting
above
None of the
Accounts payable is a _____ items. monetary non-monetary Closing rate monetary
above
None of the non-
Fixed assets, inventories are the examples of _____ items. non-monetary monetary Closing rate
above monetary
Contingent liability denominated in foreign currency at the None of the
closing opening Average rate closing
Balance Sheet date by using the _____ rate. above
None of the
Exchange difference can arise only in respect of _____ items. Non-monetary Sales Account monetary monetary
above
None of the Non-
Fixed asset is a _____ _____ item. monetary Closing rate Non-monetary
above monetary
None of the Non-
Inventory is a _____ _____ _____. Closing rate monetary Non-monetary
above monetary
None of the Non-
Investment in equity shares is a _____ _____ _____. monetary Closing rate Non-monetary
above monetary
None of the monetory
Debtors A/c is a _____ _____ _____. Sales Account monetory item Non-monetary
above item
None of the monetory
Creditors A/c is a _____ _____. Non-monetary monetory item Closing rate
above item
None of the monetory
Cash is a _____ _____. Sales Account monetory item Non-monetary
above item
None of the
Exchange rate on the date of transaction is a _____ _____. Closing rate spot rate Average rate spot rate
above
Conversion of currency is covered in AS _____. 9 13 11 14 11
The exchange difference on settlement of liability specially for exchange
asset depreciation profit & loss asset
purchase of fixed asset is transferred _____. difference
on the date of on the date of
The balance in receivable as on the date of Balance Sheet is on the date of on the date of on the date of
subsequent Balance
converted at rate _____. sale goods Balance Sheet first recovery
recovery Sheet
on date of
The amount payable for purchase on the date of Balance Sheet is on date of on date first on date of on date of
subsequent
converted at _____. purchase payment Balance Sheet purchase
payment

on date of average during date of reopening date date of

The depreciation on fixed assets is converted at rate _____.
Balance Sheet year purchase of year purchase

of loan of accrual of of Balance of accrual of

The interest of loan is converted at rate on the date _____. of payment
borrowed interest Sheet interest
The interest accrued on loan as on date of Balance Sheet is of Balance of loan average of (b) of Balance
of payment
converted at rate on date of _____. Sheet borrowed and (c) Sheet

The balance in exchange difference on transaction of export sale Debtors Profit & Loss Trading Profit & Loss
Sales Account
is transferred to _____. Account Account Account Account
The exchange difference arising due to import of raw material is Profit & Loss Profit & Loss
purchase trading suppliers
transferred to _____. Account Account

foreign reporting reporting

The currency of the enterprise preparing account is called _____. home currency own currency
currency currency currency
Bills
Following is not a monetary item : Cash Inventory Bills Payable Inventory
Receivable
An exchange rate on the date of Balance Sheet is known as non-monetary
average rate closing rate monetary rate closing rate
_____. rate
fluctuating historical
Non-monetary items are valued at _____. market price current price historical cost
price cost
settling presenting recording presenting
none of the
Reporting currency is the currency used in _____. financial financial financial financial
above
transactions statements transactions statements
used in
in presenting other than the other than
recording none of the
Foreign currency is a currency _____. foreign financial reporting the reporting
foreign above
statements currency currency
transactions
is the is the mean
on the is the mean of is rate at which
proportion of the
Average rate is the rate _____. Balance sheet the exchange asset could be
between two exchange
date rates exchanged
currencies rates

rate at the proportion rate at which proportion

mean of the
Exchange rate is the _____. Balance sheet between two asset is between two
exchange rates
date currencies exchanged currencies

Following is not an example of a monetary item._____. cash payable receivables fixed assets fixed assets
Following is an example of a non-monetary item _____. Debtors Creditors Bank A/c Stock Stock
The mean of the exchange rates in force during a period is known none of the
Average rate Closing rate Reporting rate Average rate
as _____. above
presenting recording setting the presenting
none of the
Reporting currency is the currency used for _____. financial financial financial financial
above
statements transactions transactions statements
assets and
assets and
other than liability as
liability as other exchanged at none of the
Non-monetary items are the items _____. assets and other than
than monetary fair value above
liabilities monetary
items
items
to be received
to be
to be received in fixed or to be received
none of the received or
Monetary items are the assets and liabilities _____. or paid in determinable or paid in
above paid in fixed
money amount of fixed amount
amount
money
As applicable for translation of foreign currency is _____. AS 11 AS 13 AS 14 AS 19 AS 11
Foreign Foreign
Exchange General Profit and Loss None of the Exchange
The amount of exchange difference is recorded in _____.
Fluctuation Reserve A/c A/c above Fluctuation
A/c A/c
At the end of the year the balance on Foreign Exchange General Profit and Loss None of the Profit and
Balance sheet
Fluctuation A/c is transferred to _____. Reserve A/c A/c above Loss A/c

LIQUIDATION OF COMPANIES
QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d Solution
Compulsory, Company, None of the Compulsory,
There are two types of winding up viz. (a) _____ (b) _____. Wages, Salaries
Voluntary General above Voluntary
None of the
Section _____ provide for compulsory winding up. 433 to 465 430 to 465 433 to 462 433 to 465
above
 Central The State The Registrar None of the Central
Official liquidator is appointed by the _____ _____.
Government Government of Companies above Government

Wages, Company, Compulsory, None of the Company,

Liquidator is appointed by _____ in its _____ meeting.
Salaries General Voluntary above General
The Statement of Affairs is required to be submitted to the _____ Preference Official Summary of None of the Official
_____ in case of compulsory winding up. creditors Liquidator Cash book above Liquidator
None of the
Deficiency or surplus A/c is given in list _____. B H C H
above
None of the
Assets specifically pledged are given in list _____. H C B B
above
None of the
Preferential creditors are given in list _____. H B C C
above
None of the
Bills payable are given in list _____. H C E E
above
Official Summary of Wages & None of the Wages &
Over-riding preferential payments are _____.
Liquidator Cash book Salaries above Salaries
Summary of Official Preference None of the Summary of
Liquidators final statements of A/c is a _____ of _____ _____.
Cash book Liquidator creditors above Cash book
In case of compulsory winding up remuneration of the liquidator Central The State None of the
Court Court
is fixed by the _____. Government Government above
Preferential creditors subject to section 326 are paid _____ in to
None of the
debentureholders having a floating charge on assets of the Priority Special Contributory Priority
above
company.
In case of solvency of the company interest on debentures is to be Company, None of the Date,
Date, Payment Wages, Salaries
paid upto the _____ of _____. General above Payment
Central Preference None of the Preference
Government dues are _____ creditors. Contributory
Government creditors above creditors
Retirement benefit of employees exceeding ` 20,000 per Debenturehol Preference None of the Preference
Secured creditor
employee is a _____ creditor. der creditor above creditor
None of the
Calls received in advance is an _____ creditor. Secured Shareholder Unsecured Unsecured
above
Official Preference None of the
A contributory is a _____. Shareholder Shareholder
Liquidator creditors above
A company may be wound up by NCLT when _____ resolution is Central The State None of the
Special Special
passed. Government Government above
None of the
Petition for winding up can be filed by _____. Contributory Creditors Contributory Contributory
above
Central Government can present petition to NCLT when the None of the
Public order Special Contributory Public order
company acts against _____ _____. above
All of the
A company is created by Law Nature Human being Law
above
Voluntary Compulsory None of the Compulsory
Winding up by NCLT is called as (a) & (b)
winding up winding up above winding up
All of the All of the
The petition for winding up is presented by Creditors Contributory Company
above above
Priority Second
Equity shareholders are Last claimant No claimant Last claimant
claimant claimant
Wages &
Dues to All of the All of the
Pref. creditors are Taxes Salaries
government above above
payable
Voluntary transfer is made by the company within One year Two years Three years Five years One year
Liquidator’s statement is prepared under section 143 153 156 173 156
The company
Special does not
The company
resolution is commence All of the All of the
Compulsory winding up takes place if is unable to
passed by the business within above above
pay its debts
company one year of its
incorporation
In the case of compulsory winding up, official liquidator is The Central The State The Registrar The Central
The High Court
appointed by Government Government of Companies Government

The
The Company
In the case of member’s Voluntary winding up liquidator is The Central The Board of The Registrar Company in
in General
appointed by Government Directors of Companies General
Meeting
Meeting
In a statement of affairs secured creditors are shown in List A List B List C List D List B
The Official The The Official
In case of compulsory winding up Statement of Affairs is sent to The Liquidator The High Court
Liquidator Government Liquidator
Deficiency or surplus A/c is prepared as per list H B C E H
Preferential creditors are included in list List C List B List D List E List C
Government dues that arose within 12 months before the date of Preferential Secured Unsecured None of the Preferential
winding up is treated as Creditors Creditors Creditors above Creditors
Retirement benefit of employees exceed ` 20,000 per employee is Unsecured Preferential Secured None of the Preferential
considered as : Creditors Creditors Creditors above Creditors

Added to Treated as Added to

Treated as None of the
Arrears of Preference dividend on the date of winding up is Preference unsecured Preference
secured creditor above
share capital creditor share capital

Unsecured Preferential None of the Unsecured

Calls received in advance is considered as Secured creditor
creditor creditor above creditor
Debentureholde Secured Unsecured
A contributory is a Shareholder Shareholder
r creditor creditor
Preferential Unsecured None of the Preferential
Amount due to an employee out of P.F. is Secured creditor
creditor creditor above creditor
Affairs of the
The company
special company are
acted against All of the All of the
A company may be wound up by NCLT when resolution is conducted in a
National above above
passed fraudulent
interest
manner
All of the All of the
Petition of winding up can be filed by Contributory ROC Company
above above
Sovereignty
Central Government can present a petition to NCLT for winding All of the All of the
and Integrity Security Public order
of the company if the company has acted against. above above
of India

UNDERWRITING OF
SHARES
QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d Solution
Indian companies Act, requires companies to complete minimum
90% 80% 20% 75% 90%
subscription of _____ %.

A contract whereby one party undertakes to subscribe for shares Firm None of the
Underwriting Underwriter Underwriting
in the event of under–subscription is known as _____ of shares. underwriting above

The person undertaking to subscribe the shares, in the event of Firm None of the
Underwriter Underwriting Underwriter
under – subscriptions is known as –_____. underwriting above
Section _____ places certain restrictions with reference to
26 76 56 66 76
commission to be paid for underwriting the shares.

Commission cannot exceed _____% of the issue price of shares. 2% 5% 3% 1% 5%

Commission cannot exceed _____% of the issue price of
3½ % 2½ % 4½ % 5½ % 2½ %
debentures.
Issue price of
Total shares for which guarantee is given by each underwriter Net liability None of the Gross
Gross liability shares
individually is known as _____. value above liability
underwritten
Definite commitment by the underwriters to take specified Firm Partial Firm None of the Firm
number of shares is known as _____. underwriting underwriting Underwriting above Underwriting

The applications received by the company with seal or stamp of None of the
Issue price Full Marked Marked
certain underwriter is known as _____ applications. above
Full Partial None of the
Underwriting commission is calculated on _____ price of shares. Issue price Issue price
underwriting Underwriting above
None of the
_____ Applications bear stamp of the underwriter. Debited Credited Marked Marked
above
Partial Firm None of the
In _____ underwriting all the shares are underwritten. Full Full
underwriting Underwriting above
When shares of ` 100 each are issued at 20% premium None of the
100 80 90 100
underwriting commission will be calculated on ` _____. above
None of the
Underwriter’s A/c is _____ by commission due. Credited Debited Gross liability Credited
above
Net liability None of the
Underwriter’s A/c is _____ by the shares alloted to them. Debited Credited Debited
value above
Every Company issuing shares to public must collect within 15 80% of the 90% of the 45% of the 25% of the 90% of the
days issue issue issue issue issue
The time limit for collection of minimum subscription is 15 days 21 days 7 days 5 days 15 days
3 % of issue 7.5 % of issue 5 % of issue 2.5 % of issue 5 % of issue
In case of shares commission cannot exceed
price price price price price
2.5 % of issue 7.5 % of issue 5 % of issue 10 % of issue 2.5 % of
In case of Debentures the commission cannot exceed.
price price price price issue price

Full Partial No None of the Full

When the entire issue is underwritten it is called
underwriting Underwriting Underwriting above underwriting

The applications which bear the stamp of underwriters are called Unmarked Marked Sealed None of the Marked
as applications applications applications above applications

Underwriting Underwriting
Underwriter’s Share None of the
Underwriting commission one is debited to commission commission
A/c Allotment A/c above
A/c A/c

Issue price of Marked Firm Issue price of

Net liability
Underwriting commission is calculated on shares application underwriting shares
value
underwritten value value underwritten

Applications Applications
Applications Applications
bearing no Firm bearing no
Unmarked applications are received by the issued by the
stamp of the underwriting stamp of the
company company
underwriter underwriter

Firm Partial Full All of the Full

When all the shares are underwritten it is called
underwriting underwriting underwriting above underwriting

Full Partial Firm None of the Partial

When some of the shares are underwritten it is called
underwriting underwriting underwriting above underwriting

SV Ltd. issued a 10% Debentures of ` 100 each at 20% discount.

` 100 ` 80 ` 120 ` 150 ` 80
The underwriting commission will be paid on
SV Ltd. issued shares of a face value of ` 100 each at par. The
MV is ` 120 cost is ` 90. The underwriting commission will paid ` 100 ` 120 ` 90 none ` 100
on
SV Ltd. issued shares of ` 100 each at 50% premium. All of the
` 100 ` 90 ` 150 ` 150
Underwriting commission will be paid on above

No. of shares
No. of shares
underwritten
No. of shares underwritten
When the entire issue is underwritten by Mr. Premkumar, he is No. of shares None of the less. No. of
applied by the less. No. of
liable for underwritten above shares
public shares applied
applied by
by the public
the public
 Applications Applications
Applications Applications
stamped by None of the stamped by
Marked applications are signed by the sealed by the
the above the
public company
underwriters underwriters

Applications Applications
Applications
from public Applications from public
stamped by None of the
Unmarked applications are directly given to the directly
the above
received by the brokers received by
underwriters
company the company

Face value of Issue price of Face value of Issue price of

None of the
Underwriters can claim remuneration on shares shares shares actually shares
above
underwritten underwritten purchased underwritten

When an underwriter agress to purchase a certain no. of shares in Firm Partial Full None of the Firm
addition to unsubscribed shares, it is called as underwriting underwriting underwriting above underwriting

Vide SEBI guidelines underwriting commission for Preference

2% 2.70% 2.50% 5% 2.50%
shares and Debentures upto ` 5,00,000 should not exceed.

Vide SEBI guidelines underwriting commission for Preference

2.50% 1.50% 2% 5% 2%
shares and Debentures beyond ` 5,00,000 should not exceed.

Who Who finds Who

Who is a None of the
An underwriter is a person underwrites buyers for the underwrites
broker above
the issue shares the issue
A person cannot act as an underwriter unless he holds a certificate
RBI SEBI ROC MCA SEBI
granted by

Firm Firm Firm

underwriting underwriting is Firm underwriting
None of the
When the benefit of firm underwriting is given to the underwriters is not treated not treated as underwriting is is not treated
above
as unmarked marked ignored as unmarked
applications applications applications

Firm Firm Firm

underwriting underwriting is Firm underwriting
When the benefit of firm underwriting is not given to the None of the
is treated as treated as underwriting is is treated as
underwriters above
unmarked marked ignored unmarked
applications applications applications

LIMITED LIABILITY
PARTNERSHIP
QUESTION TEXT OPTION_a OPTION_b OPTION_c OPTION_d Solution
None of the
Every Designated partner will have to obtain _____. A company A LLP DPIN DPIN
above
Rule _____ of LLP prescribes the books of accounts. 22 23 24 25 24
The books of LLP are to be retained for _____ years. 6 7 8 5 8
st st st st st
The accounting year for LLP ends on _____. 31 May 31 July 31 March 31 December 31 March
th
Every LLP has to prepare a statement of accounts on or before 30 30th
30th April 30th June 30th November
_____ every year. September September

Audit is compulsory if the turnover of LLP exceeds ` ______. ` 40,00,000 ` 20,00,000 ` 10,00,000 ` 40,20,000 ` 40,00,000

Solvency statement is filed with ROC in Form No. _____. 8 7 6 5 8

Annual Return of LLP is filed within _____ days of the end of the
60 50 40 20 60
year.
Sec _____ of LLP Act provides for conversion of partnership into
55 25 35 15 55
LLP.
At least _____ persons are required to form LLP. 1 2 4 3 2
None of the
_____ partners have to notify the changes in LLP to ROC. Accrual basis Designed Cash basis Designed
above
None of the
LLP is registered under _____ Act. 2008. NCLT LLP ICAI LLP
above
None of the
LLP has _____ succession. Accrual basis Perpetual Cash basis Perpetual
above
Companies None of the
LLP is a _____ entity. Legal LLP Act Legal
Act above
None of the
Rights of partners are governed by _____ Agreement. NCLT ROC LLP LLP
above
Chartered Cost LLP None of the LLP
Contribution is specified in _____ _____.
Accountant Accountant Agreement above Agreement
Tangible; None of the Tangible;
Contribution may be _____ or _____. Profit; Loss LLP; NCLT
Intangible above Intangible
None of the
Statement of Account & Solvency is signed by _____ partner. Designated An individual A company Designated
above
Chartered Cost Company Master of Chartered
Accounts of LLP are to be audited by
Accountant Accountant secretary commerce Accountant
Maximum number of partners in LLP is 20 50 100 No limit No limit
Agreement for LLP is in filed with ICAI NCLT ROC MCA ICAI
Registrar of
Registrar of Registrar of Registrar of Registrar of
Certificate of incorporation of LLP is issued by co–operative
firms companies Universities companies
societies
All of the All of the
A partner shall cease to be a partner on Death Retirement Winding up
above above
None of the
Liability of partners in LLP Limited Unlimited a&b Limited
above
The consent of designated partners is filed with the ROC in Form 1 Form 2 Form 3 E-Form 4 E-Form 4
Books of accounts of LLP are to be preserved for 5 years 7 years 8 years 9 years 8 years

Cash basis or Cash basis and Cash basis or

Books of accounts of LLP are maintained on Cash basis Accrual basis
accrual basis accrual basis accrual basis

Movable /
All of the All of the
Contribution can be Tangible Intangible Immovable
above above
Property
As specified As specified
None of the
Contribution by a partner to LLP is Compulsory Not compulsory by the by the
above
agreement agreement
Practicing
Practicing Cost Any one of the Any one of
Valuation of Contribution may be made by Chartered Panel member
Accountant above the above
Accountant

Termination of Any one of the Any one of

Contribution has to be refunded on death insolvency
membership above the above

Contribution Turnover Turnover less Contribution

None of the
Audit of LLP is compulsory when exceeds ` exceeds ` than ` exceeds `
above
25,00,000 50,00,000 20,00,000 25,00,000

The Central The State Registrar of The Central

Designated partner must obtain DPIN from The ROC
Government Government firms Government

All of the All of the

A partner of LLP can be An individual A company A LLP
above above
Partnership Companies Co–operative
LLP is created by LLP Act LLP Act
Act Act Societies Act
None of the
LLP can be dissolved by the order of NCLT High court District Court NCLT
above
 Perpetual No perpetual Specified None of the Perpetual
LLP has
succession succession period of life above succession
Minimum members required to form a LLP is 2 members 5 members 10 members 15 members 2 members
LLP Partnership LLP
Rights / duties of partners are governed by A/A Byelaws
agreement Deed agreement
Goods Costs ` 12,000 were destroyed by fire and the insurance
Other Selling Administrative Personnel Other
Company admitted a claim for ` 7,600. The Loss by fire is
Expenses Expenses Expenses Expenses Expenses
disclosed in statmnet of income & expenditure under