When purchasing company pays purchase consideration, it will be debited to (A)Business purchase account (B)Assets account (C) Liquidator of selling company’s account (D)None of the above

When purchasing company pays purchase consideration, it will be debited to  (A)Business purchase account  
(B)Assets account  
(C) Liquidator of selling company’s account  
(D)None of the above
by

1 Answer

Answer :

(C) Liquidator of selling company’s account
by

Related questions

When the purchasing company makes payment of the purchase consideration, it debits: A. Business purchase account B. Assets account C. Vendor company's account. D. Realisation A/c

Description : When the purchasing company makes payment of the purchase consideration, it debits: A. Business purchase account B. Assets account C. Vendor company's account. D. Realisation A/c

Last Answer : C. Vendor company's account.

Which of the following statement is correct? (A)The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only (B)The amount of Goodwill or Capital Reserve is found out in the books of vendor company only. (C)Goodwill = Net Assets –Purchase price (D)The face value of shares of purchasing company will be taken in to account while calculating purchase consideration.

Description : Which of the following statement is correct? (A)The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only (B)The amount of Goodwill or ... face value of shares of purchasing company will be taken in to account while calculating purchase consideration.

Last Answer : (A)The amount of Goodwill or Capital Reserve is found out in the books of purchasing company only

The share capital, to the extent already held by the purchasing company, is closed by the vendor company by crediting it to: A. Share capital account B. Purchasing company's account C. Realisation account. D. Business purchase account

Description : The share capital, to the extent already held by the purchasing company, is closed by the vendor company by crediting it to: A. Share capital account B. Purchasing company's account C. Realisation account. D. Business purchase account

Last Answer : C. Realisation account.

Amalgamation is said to be in the nature of merger if: A. All assets and liabilities of transferor company are taken over by the transferee company. B. Business of transferor company is intended to be carried on by the transferee company. C. Purchase consideration must be paid in equity shares by the transferee company except for fraction shares. D. All of the above

Description : Amalgamation is said to be in the nature of merger if: A. All assets and liabilities of transferor company are taken over by the transferee company. B. Business of transferor company is intended to ... paid in equity shares by the transferee company except for fraction shares. D. All of the above

Last Answer : D. All of the above

When the purchasing company does not take over a particular liability and the vendor company pays that liability, it will debit it to (A) Realisation Account (B) Bank Account (C) Liability Account (D)None of the above

Description : When the purchasing company does not take over a particular liability and the vendor company pays that liability, it will debit it to (A) Realisation Account (B) Bank Account (C) Liability Account (D)None of the above

Last Answer : (A) Realisation Account

The vendor company transfers preliminary expenses (at the time of absorption) to: A. Purchasing Company account B. Realisation account C. Purchasing company's account. D. Equity shareholders' account

Description : The vendor company transfers preliminary expenses (at the time of absorption) to: A. Purchasing Company account B. Realisation account C. Purchasing company's account. D. Equity shareholders' account

Last Answer : D. Equity shareholders' account

When the expenses of liquidation are to be borne by the purchasing company, then the purchasing company debits: A. Vendor company's account B. Bank account C. Goodwill account. D. Realisation A/c

Description : When the expenses of liquidation are to be borne by the purchasing company, then the purchasing company debits: A. Vendor company's account B. Bank account C. Goodwill account. D. Realisation A/c

Last Answer : C. Goodwill account.

Which of the following statement is correct? (A) The amount of Goodwill or Capital Reserve is recorded in the books of purchasing company only (B) The amount of Goodwill or Capital Reserve is recorded in the books of vendor company only. (C) Goodwill = Net Assets – Purchase price (D) The face value of shares of purchasing company will be taken in to account while calculating purchase consideration.

Description : Which of the following statement is correct? (A) The amount of Goodwill or Capital Reserve is recorded in the books of purchasing company only (B) The amount of Goodwill or Capital ... value of shares of purchasing company will be taken in to account while calculating purchase consideration.

Last Answer : The amount of Goodwill or Capital Reserve is recorded in the books of purchasing company only

Hitanshi Ltd.‘s purchase consideration is Rs.12,345 and Net Assets Rs.3,568, then........... (A) Goodwill Rs. 8,777 (B) Capital Reserve Rs. 8,777 (C)Goodwill Rs. 15,913 (D) Capital Reserve R

Description : Hitanshi Ltd.‘s purchase consideration is Rs.12,345 and Net Assets Rs.3,568, then........... (A) Goodwill Rs. 8,777 (B) Capital Reserve Rs. 8,777 (C)Goodwill Rs. 15,913 (D) Capital Reserve R

Last Answer : (A) Goodwill Rs. 8,777

Net Assets minus Capital Reserve is _________ (A) Goodwill (B) Total assets (C) Purchase consideration (D) None of these

Description : Net Assets minus Capital Reserve is _________ (A) Goodwill (B) Total assets (C) Purchase consideration (D) None of these

Last Answer : (C) Purchase consideration

While calculating purchase consideration ............... values of assets is to be considered. (A) Book value (B) Revalued price (C) Average price (D) Capital

Description : While calculating purchase consideration ............... values of assets is to be considered. (A) Book value (B) Revalued price (C) Average price (D) Capital

Last Answer : (B) Revalued price

If amalgamation is in the ..............., the General Reserve or Profit and Loss A/c balance will not be shown in the balance sheet. (A)Form of Merger (B)Form of purchase (C)Net assets method (D)Consideration method

Description : If amalgamation is in the ..............., the General Reserve or Profit and Loss A/c balance will not be shown in the balance sheet. (A)Form of Merger (B)Form of purchase (C)Net assets method (D)Consideration method

Last Answer : (B)Form of purchase

Sales made to Mahesh for cash should be debited to________________ a) Cash account b) Mahesh Account c) Sales account d) Purchase account

Description : Sales made to Mahesh for cash should be debited to________________ a) Cash account b) Mahesh Account c) Sales account d) Purchase account

Last Answer : a) Cash account

Under purchase method the difference between the purchase consideration and share capital of the transferee company should be adjusted to: A. General reserve B. Amalgamation adjustment account C. Goodwill or capital reserve D. None of the above

Description : Under purchase method the difference between the purchase consideration and share capital of the transferee company should be adjusted to: A. General reserve B. Amalgamation adjustment account C. Goodwill or capital reserve D. None of the above

Last Answer : C. Goodwill or capital reserve

Under pooling of interest method the difference between the purchase consideration and share capital of the transferee company should be adjusted to: A. General reserve B. Amalgamation adjustment account C. Goodwill or capital reserve D. None of the above

Description : Under pooling of interest method the difference between the purchase consideration and share capital of the transferee company should be adjusted to: A. General reserve B. Amalgamation adjustment account C. Goodwill or capital reserve D. None of the above

Last Answer : A. General reserve

When the Net Assets are less than the Purchase Consideration, the difference will be (A) Debited to Goodwill A/c (B) Debited to General Reserve (C) None of these

Description : When the Net Assets are less than the Purchase Consideration, the difference will be (A) Debited to Goodwill A/c (B) Debited to General Reserve (C) None of these

Last Answer : (A) Debited to Goodwill A/c

When the Net Assets are less than the Purchase Consideration, the difference will be (A) Debited to Goodwill A/c (B) Debited to General Reserve (C) None of these (D) Debited to Capital Reserve

Description : When the Net Assets are less than the Purchase Consideration, the difference will be (A) Debited to Goodwill A/c (B) Debited to General Reserve (C) None of these (D) Debited to Capital Reserve

Last Answer : While calculating purchase consideration ............... values of assets is to be considered. (A) Book value (B) Revalued price (C) Average price (D) Capital

Liquidator‘s statement of receipt and payment is known as A. Cash flow statement B. Deficiency a/c C. Statement of affairs D. Liquidator‘s final statement of A/c

Description : Liquidator‘s statement of receipt and payment is known as A. Cash flow statement B. Deficiency a/c C. Statement of affairs D. Liquidator‘s final statement of A/c

Last Answer : D. Liquidator‘s final statement of A/c

The first item in order of payment to be made by liquidator is A. Liquidation expenses B. Secured creditor C. Preferential creditor D. Preference shareholder

Description : The first item in order of payment to be made by liquidator is A. Liquidation expenses B. Secured creditor C. Preferential creditor D. Preference shareholder

Last Answer : A. Liquidation expenses

When liquidation expenses is paid and borne by seller company then it is debited to _______ (A) Bank A/c (B) Goodwill A/c (C) Realisation A/c (D) Capital Reserve A/c.

Description : When liquidation expenses is paid and borne by seller company then it is debited to _______ (A) Bank A/c (B) Goodwill A/c (C) Realisation A/c (D) Capital Reserve A/c.

Last Answer : (C) Realisation A/c

For paying liabilities not taken over by the purchasing company, the vendor company credits: A. Realisation account B. Bank account C. Liabilities account. D. purchasing company account

Description : For paying liabilities not taken over by the purchasing company, the vendor company credits: A. Realisation account B. Bank account C. Liabilities account. D. purchasing company account

Last Answer : B. Bank account

When the expenses of liquidation are to be borne by the vendor company, then the vendor company debits: A. Realisation account B. Bank account C. Goodwill account. D. Purchasing company account

Description : When the expenses of liquidation are to be borne by the vendor company, then the vendor company debits: A. Realisation account B. Bank account C. Goodwill account. D. Purchasing company account

Last Answer : A. Realisation account

When the purchasing company bears the liquidation expenses, it will debit the expenses to (A)Vendor Company‘s Account (B) Bank Account (C)Goodwill Account (D)None of the above

Description : When the purchasing company bears the liquidation expenses, it will debit the expenses to (A)Vendor Company‘s Account (B) Bank Account (C)Goodwill Account (D)None of the above

Last Answer : (C)Goodwill Account

If wages are paid for construction of business premises ______ A/c is credited and _____ A/c is debited. a) Wages, Cash b) Premises, Cash c) Cash, Wages d) Cash, Premises

Description : If wages are paid for construction of business premises ______ A/c is credited and _____ A/c is debited. a) Wages, Cash b) Premises, Cash c) Cash, Wages d) Cash, Premises

Last Answer : d) Cash, Premises

Amalgamate adjustment account is opened in the books of transferee company to incorporate: A. The assets of the transferor company B. The liabilities of the transferor company C. The statutory reserves of the transferor company D. The non – statutory reserves of the transferor company

Description : Amalgamate adjustment account is opened in the books of transferee company to incorporate: A. The assets of the transferor company B. The liabilities of the transferor company C. The statutory reserves of the transferor company D. The non – statutory reserves of the transferor company

Last Answer : C. The statutory reserves of the transferor company

As per AS – 14 purchase consideration is what is payable to A. Shareholders B. Creditors C. Debentureholders D. Shareholders and Debentureholders

Description : As per AS – 14 purchase consideration is what is payable to A. Shareholders B. Creditors C. Debentureholders D. Shareholders and Debentureholders

Last Answer : A. Shareholders

A company pays dividend at the A. End of the week B. End of the financial year C. End of the month D. All of the above

Description : A company pays dividend at the A. End of the week B. End of the financial year C. End of the month D. All of the above

Last Answer : B. End of the financial year

Provision for Income Tax is _____ A. Debited to P & L Appropriation A/c B. Debited to Profit and Loss A/c C. Debited to Treading A/c D. Credited to P & L Appropriation a/c

Description : Provision for Income Tax is _____ A. Debited to P & L Appropriation A/c B. Debited to Profit and Loss A/c C. Debited to Treading A/c D. Credited to P & L Appropriation a/c

Last Answer : B. Debited to Profit and Loss A/c

When the purchasing company does not take over a particular liability and the vendor company pays that liability, it will debit it to______ (A) Realisation Account (B) Bank Account (D) Liability Account (D) Creditors Account

Description : When the purchasing company does not take over a particular liability and the vendor company pays that liability, it will debit it to______ (A) Realisation Account (B) Bank Account (D) Liability Account (D) Creditors Account

Last Answer : (A) Realisation Account

While calculating purchase price, the following values of assets are considered (A)Book value (B)New values fixed (C)Average values (D)Market values

Description : While calculating purchase price, the following values of assets are considered (A)Book value (B)New values fixed (C)Average values (D)Market values

Last Answer : (B)New values fixed

The Amalgamation Adjustment Account appears in the books, it is shown under the heading of ......... in the balance sheet. (A)Reserve and Surplus (B)Fixed Assets (C)Investments (D)Miscellaneous expenditure

Description : The Amalgamation Adjustment Account appears in the books, it is shown under the heading of ......... in the balance sheet. (A)Reserve and Surplus (B)Fixed Assets (C)Investments (D)Miscellaneous expenditure

Last Answer : (D)Miscellaneous expenditure

(i) Purchase of Assets should be debited to purchase A/c.

Description : (i) Purchase of Assets should be debited to purchase A/c.

Last Answer : Do you agree or disagree with the following statements : (i) Purchase of Assets should be debited ... NEFT, RTGS Transaction Cash A/c is affected.

Net Assets of D.Co. for Purchase Consideration worth Rs. 4,00,000. At the time of absorption, the company has paid 32,000 equity shares each of Rs.10 each at 10% premium, then remaining cash will be - (A) Rs. 48,000 (B) Rs. 84,000 (C) Rs. 80,000 (D) Rs. 90,000

Description : Net Assets of D.Co. for Purchase Consideration worth Rs. 4,00,000. At the time of absorption, the company has paid 32,000 equity shares each of Rs.10 each at 10% premium, then remaining cash will be - (A) Rs. 48,000 (B) Rs. 84,000 (C) Rs. 80,000 (D) Rs. 90,000

Last Answer : (A) Rs. 48,000

Under the Insolvency and Bankruptcy Code, 2016, the fees of the liquidator is paid from the proceeds of sale of the ____________of the corporate debtor. a) unencumbered liabilities b) liquidation assets c) liquidation fund d) unencumbered reserves

Description : Under the Insolvency and Bankruptcy Code, 2016, the fees of the liquidator is paid from the proceeds of sale of the ____________of the corporate debtor. a) unencumbered liabilities b) liquidation assets c) liquidation fund d) unencumbered reserves

Last Answer : b) liquidation assets

Unpaid calls are shown in the balance sheet of a company A. By adding it to the share capital B. By deducting it from the called-up share capital C. Under the head 'current assets' D. Under the head 'current liabilities'

Description : Unpaid calls are shown in the balance sheet of a company A. By adding it to the share capital B. By deducting it from the called-up share capital C. Under the head 'current assets' D. Under the head 'curent liabilities'

Last Answer : B. By deducting it from the called-up share capital

Bonus shares can be issued by a company A. Out of the Reserves created by revaluation of fixed assets B. Out of share premium not collected in cash C. Without any provision for it in the Articles of Association of the company D. Out of free reserves built out of genuine profit

Description : Bonus shares can be issued by a company A. Out of the Reserves created by revaluation of fixed assets B. Out of share premium not collected in cash C. Without any provision for it in the Articles of Association of the company D. Out of free reserves built out of genuine profit

Last Answer : D. Out of free reserves built out of genuine profit

Fixed assets are held by business for _____ a) Converting into cash b) Generating revenue c) Resale d) None of the above

Description : Fixed assets are held by business for _____ a) Converting into cash b) Generating revenue c) Resale d) None of the above

Last Answer : b) Generating revenue

Which of the following is not deferred revenue expenditure? A. Heavy advertisement expenditure. B. Expenses incurred in removing the business to more convenient premises. C. Preliminary expenses. D. Depreciation on fixed assets.

Description : Which of the following is not deferred revenue expenditure? A. Heavy advertisement expenditure. B. Expenses incurred in removing the business to more convenient premises. C. Preliminary expenses. D. Depreciation on fixed assets.

Last Answer : D. Depreciation on fixed assets.

The assets of a business can be classified as A. Only fixed assets B. Only current assets C. Fixed and current assets D. None of the above

Description : The assets of a business can be classified as A. Only fixed assets B. Only current assets C. Fixed and current assets D. None of the above

Last Answer : C. Fixed and current assets

What are the factors that contribute to the Business Success? A. marketing resources B. physical assets C. financial factors D. all of the above

Description : What are the factors that contribute to the Business Success? A. marketing resources B. physical assets C. financial factors D. all of the above

Last Answer : D. all of the above

According to which concept, the proprietor pays interest on drawings a) Accrual concept b) Conservatism concept c) Entity concept d) Dual Aspect concept

Description : According to which concept, the proprietor pays interest on drawings a) Accrual concept b) Conservatism concept c) Entity concept d) Dual Aspect concept

Last Answer : c) Entity concept

Underwriting in terms of shares means 1. Agreeing to purchase shortfall of shares in a company in case of undersubscription 2. Selling shares at a discount 3. Purchasing property at less than market price 4. a and b 5. None of these

Description : Underwriting in terms of shares means 1. Agreeing to purchase shortfall of shares in a company in case of undersubscription 2. Selling shares at a discount 3. Purchasing property at less than market price 4. a and b 5. None of these

Last Answer : Agreeing to purchase shortfall of shares in a company in case of undersubscription

Globalisation means A. Adopting a global outlook for business B. Inviting multinationals in the country C. Selling in the foreign market D. All of the above

Description : Globalisation means A. Adopting a global outlook for business B. Inviting multinationals in the country C. Selling in the foreign market D. All of the above

Last Answer : A. Adopting a global outlook for business

Which act gave the Government enormous control over the management? A. Company's act B. Industrial act C. M.R.T.P. Act D. Both (A) and (B)

Description : Which act gave the Government enormous control over the management? A. Company's act B. Industrial act C. M.R.T.P. Act D. Both (A) and (B)

Last Answer : D. Both (A) and (B)

Which of following is not Method of calculation of Purchas Consideration? A. Lump sum Method B. Net Asset Method C. Net Payment Method D. Annuity Method

Description : Which of following is not Method of calculation of Purchas Consideration? A. Lump sum Method B. Net Asset Method C. Net Payment Method D. Annuity Method

Last Answer : D. Annuity Method

Himanshi Ltd. purchase consideration is Rs.22,345 and Net Assets Rs.6,568, then........... (A) Goodwill Rs. 15,777 (B) Capital Reserve Rs. 15,777 (C) Goodwill Rs. 28,913 (D) Capital Reserve Rs. 28,913

Description : Himanshi Ltd. purchase consideration is Rs.22,345 and Net Assets Rs.6,568, then........... (A) Goodwill Rs. 15,777 (B) Capital Reserve Rs. 15,777 (C) Goodwill Rs. 28,913 (D) Capital Reserve Rs. 28,913

Last Answer : (A) Goodwill Rs. 15,777

Net Assets minus Capital Reserve is _________ (A) Goodwill (B) Total assets (C) Purchase consideration (D) None of these

Description : Net Assets minus Capital Reserve is _________ (A) Goodwill (B) Total assets (C) Purchase consideration (D) None of these

Last Answer : (C) Purchase consideration

The assets which is not taken under the net assets method of calculating Purchase Consideration is: (A) Loose Tools (B) Bills Receivable (C) Machinery (D) Share issued expenses

Description : The assets which is not taken under the net assets method of calculating Purchase Consideration is: (A) Loose Tools (B) Bills Receivable (C) Machinery (D) Share issued expenses

Last Answer : (D) Share issued expenses

In computing purchase consideration by ‘net asset method’ all assets including fictitious assets should be considered.

Description : In computing purchase consideration by ‘net asset method’ all assets including fictitious assets should be considered.

Last Answer : FALSE