Two or more companies combining to form a new company is called absorption.

1 Answer

Answer :

False

Related questions

Description : When two or more companies carrying on similar business decide to combine, a new company is formed, it is known as .................. (A) Amalgamation (B) Absorption (C) Internal reconstruction (D) External reconstruction

Last Answer : (A) Amalgamation

Description : Absorption is said to take place when an existing company takes over one or more existing companies.

Last Answer : TRUE

Description : When one of the existing companies take over business of another company or companies, it is known as ........... (A) Amalgamation (B) Absorption (C) Internal reconstruction (D) External reconstruction

Last Answer : (B) Revised Value

Description : Both of the old companies will not exist in ........... (A) Internal reconstruction (B) Absorption (C) External reconstruction (D) Amalgamation

Last Answer : (D) Amalgamation

Description : In case of .............., one existing company takes over the business of another company and no new company is formed.(A) Amalgamation (B) Absorption (C) Reconstruction (D) None of the Above

Last Answer : (B) Absorption

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

Description : When company purchases the business of another company ........ comes into existence. (A) Amalgamation (B) Absorption (C) External Reconstruction (D) Internal Reconstruction

Last Answer : (B) Absorption

Description : In amalgamation of two companies (A) Both companies lose their existence (B) Both companies continue (C) Any one company continues

Last Answer : (A) Both companies lose their existence

Description : to increase absorption of oral iron , give with: - Vit C - Vit E - Zinc - Ca - Antacid

Last Answer : Vit C

Description : If the market price of the shares to be given for Purchase Consideration at the time of absorption, ............ of the share is to be determined (A) Fair Value (B) Face Value (C) Intrinsic Value (D) Yield Value

Last Answer : (C) Intrinsic Value

Description : Kirti Co’s Balance Sheet shows Fixed Asset Rs. 3,60,000. At the time of absorption calculation of Net Assets is 10% less than the market value, then market value of such fixed assets is ............ (A) Rs. 3,24,000 (B) Rs. 4,00,000 (C) Rs. 4,20,000 (D) None of these

Last Answer : (B) Rs. 4,00,000

Description : Accounting standard (AS) 14 not distinguish between amalgamation and absorption.

Last Answer : TRUE

Description : In amalgamation of companies there are two or more liquidation and one formation.

Last Answer : TRUE

Description : LLP is governed by a) Partnership Act , 1932 b) Companies Act , 1956 c) Limited Liability Partnership Act , 2008 d) Companies Act , 2013

Last Answer : c) Limited Liability Partnership Act , 2008

Description : The underwriters may be individuals , partnership firms or joint stock companies.

Last Answer : TRUE

Description : Amalgamation of companies is governed by - (A) AS -14 (B) AS-11 (C) AS- 13 (D) AS-9

Last Answer : (A) AS -14

Description : Amalgamation of companies is governed by AS 13.

Last Answer : FALSE

Description : The shares received from the new company is recorded at________ (A) Face value (B) Market value (C) Average price (D) None of these

Last Answer : (B) Market value

Description : Shares received from the new company are recorded at - (A) Face value (B) Average price (C) Market value (D) None of the above

Last Answer : (C) Market value

Description : Company incorporated outside India can become a partner in a LLP.

Last Answer : TRUE

Description : Company incorporated outside India can become a partner in a LLP.

Last Answer : TRUE

Description : When the liquated company has adequate cash to pay off all liabilities , the interest on liabilities should be paid : a) Upto the date of commencement of insolvency proceedings b) Upto the date of actual payment of liabilities c) Upto the date of payment to shareholders d) None of the these

Last Answer : d) None of the these

Description : If a default is made in delivering the annual return to the Registrar , the company is likely to facea) Compulsory winding up by the tribunal. b) Voluntary winding by members. c) Voluntary winding up by creditors. d) None of the above

Last Answer : a) Compulsory winding up by the tribunal.

Description : A contributory can only be present member of liquidated company.

Last Answer : FALSE

Description : If the company is insolvent , interest on debentures is payable upto the date of actual payment.

Last Answer : FALSE

Description : Only an insolvent company can be liquidated.

Last Answer : FALSE

Description : Intrinsic value of each equity shares of the vendor company is Rs. 250 and that of the purchasing company is Rs. 400. The exchange ratio of shares on the basis of intrinsic value is - (A) 2:1 (B) 8:8 (C) 8:5 (D) None of the above

Last Answer : (C) 8:5

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

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

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

Description : A LLP is a new form of legal business entity with unlimited liability.

Last Answer : FALSE

Description : A LLP is a new form of legal business entity with unlimited liability.

Last Answer : FALSE

Description : On amalgamation , payment to creditors do not form part Purchase of Consideration

Last Answer : TRUE

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Description : External reconstruction is more or less same as that of amalgamation in the nature of purchase.

Last Answer : TRUE

Description : At least of the designated partners of every limited liability partnership shall be a resident in India. a) One b) Two c) Three d) Seven

Last Answer : c) Three

Description : Every Limited Liability Partnership must have at least two partners but there is no maximum limit on the numbers of partners.

Last Answer : TRUE

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